The group is seeking to strengthen its balance sheet in response to uncertainty around the impact of Covid-19.
New Zealand.- SkyCity Entertainment Group has officially launched a plan to raise equity as part of a strategy to strengthen its balance sheet in response to uncertainty over the extent of the impact of Covid-19.
It’s aiming to raise NZ$230 million through a NZ$180 million share placement to institutional investors and a NZ$50 million share purchase plan targeting retail shareholders, reflecting the composition of the group’s share register as of June 16.
The group said in a press release: “Whilst trading since reopening has been encouraging, SkyCity has been severely impacted by the closures and continues to closely monitor the potential impacts of the virus on its operations, financial position and outlook. Uncertainty remains regarding the future economic environment and ongoing closure of international borders.
“In structuring the offer, priority has been given to ensure existing shareholders get their pro rata share. Shares will be issued under the institutional placement at NZ$2.50 per share (which represents a circa 6% discount to yesterday’s closing price). The share purchase plan, that opens on 22 June 2020, will be priced at the lower of $2.50 or a 2.5% discount to the average market price during the week before the offer closes on 3 July 2020.”
Chief Executive Officer Graeme Stephens said: “This includes downsizing our waged workforce to ensure our business is best prepared to operate in the new environment. Fortunately the majority of affected employees have requested voluntary redundancy and the restructure is expected to be finalised this week.”
“For now, our focus is on ensuring we continue to manage our business safely and effectively through this challenging period to emerge in a strong position to capitalise on the great assets we have and the opportunities that lie ahead.”
Due to the pandemic crisis and measures to prevent further spreading of the virus, SkyCity closed operations in late March and reopened its New Zealand properties excluding Wharf Casino on May 14.
It hopes to open its Adelaide Casino in late June.