SkyCity Entertainment Group wants to sell its Darwin casino business in Australia’s Northern Territory for at least AU$200 million, according to a report in The Australian newspaper.
The NZX-listed company has been reviewing options for the Darwin business since October. In February it said there was no urgent time pressure, “given the property is profitable and cash generative.”
New Zealand’s only listed casino company is looking to free up cash from its existing assets during a period of heavy investment and has appointed investment bank Goldman Sachs to test interest in its Darwin casino as it continues to evaluate strategic options for the business, including a full sale.
Any funds from a sale would be used to repay debt in the short term, and fund strategic and growth initiatives.
SkyCity is “highly unlikely” to find another casino company to buy the business, the Australian newspaper said, citing sources it didn’t identify. A more probable outcome is that a private consortium, which already holds interests in the Northern Territory, acquires the casino.
Last year the company wrote down this investment by AU$95m to AU$195m after the business was hurt by increased rivalry from gaming machines in local pubs and clubs over the past two years.
In the first six months of 2016 the Darwin business generated AU$20.2m in earnings before interest, tax, depreciation and amortisation and about AU$71.4m in revenue.