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SkyCity formally announces Darwin casino sale to Delaware North

Wed, Apr 3, 11:07am by Staff Writer

SkyCity has finally confirmed the sale of its Darwin casino to US-based global hospitality operator Delaware North in a statement made by chief executive officer Graeme Stephens.

“We are pleased that the sale of SkyCity Darwin is now unconditional. The sale is consistent with our strategy to sell certain non-core assets and to allocate capital to assets and businesses which we feel are better aligned with our long-term strategic objectives,” Mr Stephens said.

The Hotel Conversation detailed the key terms of the sale are that the sale price of A$188 million is for 100 per cent shares in SkyCity Darwin Pty Limited.

The Little Mindil property located adjacent to the SkyCity Darwin site, has been retained by SkyCity and is to be sold separately. It is valued at A$11 million.

“Following completion of the transaction, SkyCity will provide certain agreed transitional services to Delaware North,” Mr Stephens said.

“Completion of the sale is expected to occur on April 4, 2019.”

In a previous statement made in November 2018, Mr Stephens said that the sale is a good outcome for SkyCity, the resort’s staff and the city of Darwin.

“I’m really pleased that following a very competitive tender process, Delaware North has emerged as the successful bidder,” he said.

“They are a highly respected and well-established hospitality and gaming company and I’m very comfortable handing over the business we have built up over the past 14 years to an operator of this calibre.”

Mr Stephens says while the resort has been performing better from a financial point of view during the past 12 months, SkyCity’s future strategy had the company looking closer to its New Zealand home base and its expanding casino facilities in Adelaide.

“Selling was not an easy decision. We’re proud of our contribution to Darwin and the Northern Territory over the past 14 years.”

“Since we purchased the business in 2014, we’ve developed Darwin’s casino into an integrated entertainment destination, refurbishing the resort, adding new restaurants, bars and VIP facilities, a new 5-star resort hotel and supporting various community events.”

“So now feels like the right time to hand the baton across to a new owner to continue the next stage in Darwin casino’s journey,” Mr Stephens said.

SkyCity will continue to use VIP facilities

Delaware North co-chief executive officer Lou Jacobs said Australia has been a second home to the company for 30 years.

“We are thrilled to have grown our business into a diversity of operations across the country, which has been possible because of our incredibly talented and diverse workforce of more than 10,000 people,” he said.

SkyCity’s association with Darwin will continue for some time, through the ongoing use of the casino’s VIP facilities for at least the next two years and the company also retains the rights to operate an online casino in partnership with Delaware North, should a license be granted in the future.

With the sale of the Darwin casino still contingent on matters, including the new owner gaining regulatory approvals in the Northern Territory, SkyCity will continue running the business until regulatory approval is received.

All the company’s 650 staff will be retained once the change of ownership takes effect.

SkyCity purchased the Darwin casino from MGM in 2004 for a reported A$195 million.

The New Zealand-based company has decided to focus its efforts towards strengthening its assets in New Zealand and Adelaide, which have proved more profitable than their venture up north.

SkyCity Darwin has 600 poker machines, more than 30 table games, four restaurants, five bars, a day spa and conference spaces.

It is Darwin’s only five-star hotel and resort.

The chief executive of SkyCity Graeme Stephens said the sale “is a good outcome for SkyCity, the resort’s staff and the city of Darwin”.

The company’s 650 staff will be retained once the change of ownership takes effect.

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