SkyCity Darwin casino sale back to being a possibility

There is renewed speculation that SkyCity may put its troubled Darwin casino up for sale after comments from SkyCity’s new chief executive at an AGM in Auckland.

CEO Graeme Stephens reportedly told shareholders that the casino had had “a tough year” following a decision by the government of the Northern Territory to allow 75 percent more gaming machines in pubs and clubs.

The company had already written down the value of its investment by A$95 million to A$195 million compared to its 2004 purchase price of A$195 million from MGM Mirage of US$231 million (in 2004 dollars).

Mr Stephens said that despite a great location and the company’s owning land adjacent to the casino, it would not be making further investments there alone, and was now conducting a strategic review of its options to create shareholder value.

He confirmed this would include a sale “but we aren’t there yet,” he said. Bringing in an investment partner was also being considered.

Darwin lost NZ$85.2 million ($59 million) in the last year compared to an ebit of NZ$22.5 million ($16 million) the previous year.

A further trading update for the company – including progress on its major capital investments – is expected in mid-November.