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Source: ONE News -
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Casino operator Skycity Entertainment Group Ltd is looking to raise $178.9 million via a share placement to reduce its gearing and net debt.
Skycity has announced a placement of 71 million ordinary shares at $2.52 per share and will also offer a share purchase plan of up to $35 million to New Zealand and Australian shareholders.
Skycity says a maximum $15 million top-up offer will be made to a small number of eligible shareholders in New Zealand whose holding would otherwise be diluted by the placement.
In Skycity's announcement, CEO Nigel Morrison moved to assure the market that the company had a sound balance sheet and a "well diversified debt structure".
"We have determined, however, that it is prudent to proactively strengthen the company's capital structure and enhance its financial flexibility through an underwritten placement. This equity raising will materially reduce gearing and net debt, and significantly improve credit metrics," he said.
Skycity is the latest in a string of corporates to announce capital raising, following the likes of Fletcher Building, Freightways and Xero.
"It probably highlights that this company, along with many others, is not immune from the worsening economic conditions that are out there," says market analyst Belinda Stanley.
In February, Skycity reported a reasonable net half-year profit after tax for the year to December of $55.6 million, down from $55.9 million.
At the time, CEO Nigel Morrison said the decline reflected increasing operational costs and the difficulty of generating revenue in a tough economic climate.
Skycity paid an interim dividend of 9.0 cents per share on 27 March.
Prior to the halt, shares were trading at $2.85, down 0.080 or 2.73%.
Skycity says the trading halt placed on Tuesday morning will
remain until the placement is completed.
