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  • Casino operator SkyCity Entertainment Group (SKC) is set to raise $230 million to help the company rebound from COVID-19 shutdowns
  • SkyCity closed its doors in late March due to government-enforced coronavirus restrictions which put a massive dent in its finances but has slowly reopened its premises
  • The equity raise will comprise of a fully underwritten $180 million placement and a $50 million share purchase plan
  • Additionally, the company has secured support from its existing lenders, extensions to upcoming debt maturities and additional debt facilities
  • SkyCity said the funding plan effectively resets its capital structure to provide sufficient funding over the medium-term
  • SkyCity shares last traded for $2.58 each, and will emerge from its trading halt tomorrow

SkyCity Entertainment Group (SKC) has announced a funding plan to help the company rebound from COVID-19 pandemic induced financial turbulence.

The company, which owns and operates five casinos in New Zealand and Australia, called ‘no more bets’ and shut its doors back in March to keep in line with government-enforced restrictions to mitigate the spread of coronavirus.

SkyCity will undertake a $230 million equity raise, and additionally, the company said it has secured support from its existing lenders, extensions to upcoming debt maturities and additional debt facilities.

The funding plan effectively resets its capital structure to provide sufficient funding over the medium-term.

“For now, our focus is on ensuring we continue to manage our business safely and effectively through this challenging period to emerge in a strong position to capitalise on the great assets we have and the opportunities that lie ahead.”

SkyCity Chief Executive Officer, Graeme Stephens

The company said it was now comfortable in re-instating its earnings guidance for FY20. It expects its group normalised earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $185 and $205 million. SkyCity’s Group reported EBITDA is expected to be in the range of $440 and $480 million.

Equity raising

The equity raise will comprise of a fully underwritten $180 million placement and a $50 million share purchase plan.

The placement has been underwritten at a fixed price of $2.50 per share, which SkyCity said represents a 6.4 per cent discount to the last close price of $2.67 per share.

Eligible existing shareholders can subscribe for up to $50,000 of new shares, which SkyCity said can’t be oversubscribed from the $50 million.

The new shares from the $180 million placement are due to settle next week. The SPP opens on Monday and closes on Friday, July 3.

SkyCity shares last traded for $2.58 each, and will emerge from its trading halt tomorrow.

SKC by the numbers
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