SkyCity wanting to sell Darwin casino for $212m

Source: NZN

SkyCity Entertainment Group wants to sell its Darwin casino business in Australia's Northern Territory for at least $A200 million ($NZ212m) and hasn't yet attracted a buyer because the asking price is seen as "a little too high", according to a report in The Australian newspaper.

The casino has begun expansion plans despite the fact the contract for the international convention centre has not yet been signed.

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.

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 unidentified sources.

A more probable outcome is that a private consortium, which already holds interests in the Northern Territory, acquires the casino, the report said.

Australian casino operator The Star Entertainment Group and Malaysia's Genting Group aren't interested in buying Darwin casino, the newspaper said.

It namechecked likely buyers including Darwin's Paspaley family, wealthy local entrepreneur John 'Foxy' Robinson, the Halikos family and the Coombes family. Information memorandums for the business were now circulating in the market, the newspaper said.

SkyCity bought the Darwin casino and hotel business from US-based MGM Mirage in 2004 for A$195m as part of its Australian expansion following its purchase of Adelaide casino.

In its latest financial year, the company wrote down its Darwin investment by $A95 million to $A195 m after it recognised the business had been hurt by increased rivalry from gaming machines in local pubs and clubs over the past two years.

The company's shares last traded at $3.93, and have slid 10 per cent over the past year.