SkyCity rolls dice on selling Adelaide casino
The owner of Adelaide’s casino and luxury hotel on North Terrace is looking for buyers just months after it was hit with multimillion-dollar state government-issued fines.
The operator of the Adelaide casino SkyCity and the luxury Eos Hotel will “shortly commence a formal sale process” for the landmark buildings, the company announced yesterday.
Private bank UBS said the group wanted to hear from those interested in buying the striking gold building on Festival Plaza, the company told shareholders in a trading update.
According to SkyCity, the company “has received inquiries from credible interested parties in that asset” that was developed around the Adelaide Railway Station.
The business also revealed that two parties put forward unsolicited approaches to buy the entire company, which also runs a casino in Auckland, New Zealand.
In a company statement, SkyCity said the board unanimously determined the proposals did not “adequately reflect the underlying value of the company”, so SkyCity did not move forward on the terms proposed, but remains engaged with both parties.
This follows SkyCity being slapped with a $21 million fine after a major review of its Adelaide business, conducted by retired Supreme Court Judge Brian Martin.
This review highlighted multiple failures by SkyCity’s previous management in fulfilling its obligations under anti-money laundering and counter-terrorism laws.
In August last year, Martin concluded that SkyCity was suitable to hold Adelaide’s only casino licence, but that previously the business had a “poor and inadequate culture” and that it “failed to comply with its obligations”.
SkyCity also saw its profits take a nosedive in the last financial year, with the company announcing in August that group profits were down 37.6 per cent to $15.1 million for the year – more than $10 million less than last year’s result.
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A strategic review of SkyCity’s Adelaide business is ongoing, and the $21 million fine will be paid in three equal instalments over two years to the state.
Group debt was at $492.7 million – “marginally above our expectations”, the company’s results read.
SkyCity also announced yesterday that it was “well advanced in negotiating a binding agreement with Consumer and Business Services”.
This agreement would “fully and finally resolve all outstanding regulatory matters arising from the Independent Review”.
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