SKYCITY Entertainment Group Limited has found a buyer for its Darwin business with US firm Delaware North agreeing to purchase SKYCITY Darwin for AU$188 million.
The sale will see Delaware North acquire 100% of SKYCITY Darwin Pty Limited on a cash-free and debt-free basis, although SKYCITY said on Thursday morning that it will retain its adjacent Little Mindil property to be sold separately.
SKYCITY has also retained the ongoing right to access the VIP and premium gaming facilities at the Darwin casino for its International Business customers for at least two years after completion of the sale.
In a further announcement, the two companies – SKYCITY and Delaware North – revealed that they plan to enter into a joint venture to establish an online casino business based out of the Northern Territory should there be any future change in legislation in Australia permitting online gaming activities within the next decade.
Inside Asian Gaming understands there is currently a concerted push to have online poker legalized in the near future although online casino games are likely many years away.
Commenting on the transaction, SKYCITY CEO Graeme Stephens said the sale was a positive result for the company.
“We see both International Business and the online space as future growth areas for us, so we see value in this outcome,’’ he said.
“The sale is consistent with our ‘capital lighter’ strategy to sell non-core assets and to allocate capital to assets and businesses which we feel are aligned with our long-term strategic objectives. As always, our top priority is to deliver attractive and sustainable returns for shareholders.
“It also allows us to concentrate our Australian activities in Adelaide, which is undergoing an AU$330m expansion, due for completion in late 2020.’’
SKYCITY purchased the Darwin-based casino in 2004 from MGM Grand, subsequently adding a new hotel and pool, new bars and restaurants and VIP facilities. The value of the business was impaired by AU$95m in FY17 due to changes in gaming regulations but the property experienced positive earnings growth in FY18 on a like-for-like basis.
SKYCITY will continue to own and manage the Darwin casino on a business-as-usual approach while Delaware North obtains the required approvals from the Northern Territory Government.