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Source: ONE News -
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Casino operator Skycity has raised $185 million via a share placement to institutional investors.
Skycity on Tuesday requested a trading halt to carry out the placement to raise $178.9 million and announced the completed placement on Wednesday morning.
Seventy-one million ordinary shares were placed and achieved $2.61 per share.
"We are pleased with the results of the placement, which closed at the top end of the bookbuild range at $2.61 per share," Skycity CEO Nigel Morrison said.
Morrison said the company received strong support from existing institutional shareholders in New Zealand and Australia, as well as significant interest from a range of major international institutional shareholders.
The placement will be followed up by a share purchase plan and a top-up offer giving eligible shareholders the chance to participate in the capital raising.
Skycity says more details on the plan and top-up will be announced shortly.
The company said on Tuesday that the capital raising was to reduce gearing and net debt, but it has been questioned by some market analysts.
According to the New Zealand Herald, Skycity's debt commitments do not begin until May 2010 when $124 million is due to New Zealand capital noteholders. It then has a further three debt payments due between December 2010 and 2020.
First NZ Capital analyst Rob Hyde told the Herald that the capital raising may give Skycity the chance to retire debt ahead of time, but he said that money would likely end up sitting as cash and possibly impact share earnings.
Similarly, Brad Gordon from MacQuarie Private Wealth says existing shareholders have the right to be disappointed at the outcome which was available first to outside investors.
"[Skycity] are highly geared but debt hasn't been a problem, their share price hasn't fallen significantly...I think they've come to the market because others have," he says.
Skycity is the latest in a string of companies to go to the market to raise capital, including Fletcher Building, Freightways and Xero.
Sharemarket operator NZX lifted Skycity's trading halt on Wednesday morning.
