SkyCity making room for casinos

In an attempt to free up capital, SkyCity Entertainment sold off its part of the Christchurch Hotel in New Zealand. Their part of the hotel was sold to an Australian investor for over sixty one million dollars. Skyline Enterprises, the other main shareholder of the Crowne Plaza Christchurch hotel also sold their share to Eureka Funds Management. Separately from this transaction, the two companies Skycity and Skyline completed a different deal which resulted in raising their holdings of the Christchurch casino from forty one percent to forty six percent. “From our point of view it gives us an increased stake in a core casino asset and out position in the hotel is less core,” commented Alistair Ryan, chief financial officer with SkyCity.

The two deals involved, selling off of the Christchurch hotel as well as the buying of more shares in the Crowne Plaza Christchurch casino are still subject to conditions as well as approvals from the Overseas Investment Office. Jeremy Simpson who is an analyst with Forsyth Barr commented, “It looks like quite a good deal. It’s definitely a positive – their focus is casinos.”

The Christchurch hotel will still remain under IHG management and still use the Crowne Plaza brand after an agreement was made with new shareholders Eureka and operator IHG. The deals were looked upon positively in trading today as SkyCity’s shares were up at closing yesterday with a final price of $3.58. Help the stock surge is the cash surplus that SkyCity will now have to work with once the deals are approved.