SkyCity’s largest shareholder is rejecting plans by the New Zealand and Australian gaming operator to raise more than AU$200 million ($129.07 million) from shareholders.
According to the Australian Financial Review, Allan Gray, which holds over 15 percent of SkyCity shares, is against the equity raising move and plans to vote against the future re-election of any current board directors.
Allan Gray’s Managing Director, Simon Mawhinney, called the equity raising “ludicrous”.
The executive highlighted the group’s Australian operations as “a shareholder-funded bottomless pit,” opening that “Rather than raise money from shareholders, they should walk away from the complex and hand the keys to anyone who will take them.”
Mawhinney notes that current government taxes and penalties the company is facing or could face in the future, plus funding for its compliance measures mean the Adelaide casino holds no value for shareholders.
“The company’s share price weakness and the depressed point in the economic cycle should be enough to guide sensible stewards of capital off the equity raising ledge,” cites the publication.
“SkyCity is an asset-rich company with a lot of tools at its disposal for de-gearing, all of which would be significantly better than incredibly dilutive sugar hits in the form of an equity raising,” furthered Mawhinney.
SkyCity halted trading on the Australian Securities Exchange (ASX) on Tuesday, pending an announcement release.
The group notes the release is expected to include an announcement of a capital raise, as well as its financial results for the first half-year.
The company noted that ‘SkyCity is aware of certain media reports regarding the proposed capital raise and its FY25 Results but is not presently in a position to make an announcement regarding the capital raise, as no final decision has been made to proceed and the final details are still being determined.’
Earlier in August, SkyCity was found suitable to maintain its Adelaide casino license, despite ‘significant failings’ in regards to AML/CTF and gambling harm minimization.
