SkyCity Suspends Share Trading as It Plans Capital Raise

Casino operator SkyCity Entertainment has suspended trading of its shares at its own request as it explores the possibility of raising new capital. The decision comes amid reports that the company is considering raising over $200 million to bolster its financial position.

In a statement to the NZX, SkyCity acknowledged media speculation regarding its potential capital raise, stating, “SkyCity … 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.”

The trading halt is set to remain in effect while the company finalizes the details of any potential capital raise and prepares to report its annual earnings, which are expected on Thursday morning. Should the capital raise proceed, SkyCity indicated that it would need to extend the trading halt until the offering is completed.

SkyCity’s financial difficulties have been compounded by soft earnings, high debt levels, and ongoing scrutiny from regulators concerning its casino operations. The company recently faced an independent inquiry in South Australia, which cleared it to maintain its license to operate the Adelaide casino, despite admitting to breaches of anti-money laundering and host responsibility rules.

Earlier in May, the company cautioned that its full-year profit would be lower than initially anticipated due to weak consumer spending and a lack of tourists. As a result, the current financial climate poses significant challenges for SkyCity as it navigates its future funding options.