Less than a week after confirming an agreement to sell off an office building and investment properties located near its SkyCity Auckland integrated resort, SkyCity Entertainment Group has entered into a non-binding heads of agreement for the sale of the property’s luxury The Grand Hotel.
Part of the group’s “Asset Monetisation Programme,” SkyCity revealed by way of a Wednesday filing that it expects to receive cash proceeds from the sale by the end of this year, although the financial terms remain confidential at this stage.
The sale is also subject to the negotiation and execution of binding sale and purchase documentation upon satisfactory completion of due diligence, and is expected to be conditional on consent from the New Zealand Overseas Investment Office.
SkyCity said proceeds received under its “Asset Monetisation Programme” will be used to repay debt and provide the company with greater financial flexibility to navigate current market conditions.
In a note, investment firm Forsyth Barr said it valued the Grand Hotel at around NZ$200 million (US$117 million) in its sum-of-the-parts valuation although “industry channel checks and recent transactional evidence suggested there was upside to our valuation,” with a sale price of between NZ$200 million and NZ$250 million (US$117 million to US$146 million) achievable.
“If this transaction completes, in combination with the sale of 99 Albert Street and the Victoria Street properties, SkyCity will exceed its NZ$200 million asset sale target,” wrote Senior Analyst Paul Laxton Koraua.
“This is an important announcement for SkyCity [because] it would complete its asset monetization strategy, it returns gearing to within the board target of <2x EBITDA and should remove S&P’s negative watch on its credit rating, and provides scope for a potential return to dividends in FY27 when it reports in August 2026.”
RelatedPosts
