23 Apr 2009

Sky City raises $185m overnight

8:00 am on 23 April 2009

Sky City Entertainment has raised $185 million since Tuesday by issuing new shares and will use the funds to strengthen its balance sheet.

Institutional investors bought 71 million new shares at a price of $2.61 per share.

The casino operator plans to offer new shares to retail investors on its books from 30 April. The $35 million dollar top-up will bring total funds raised to $220 million.

Analaysts say the company is in a strong position and does not need to raise the extra funds, but is prudent to look ahead given the state of credit markets.

Sky City says the issue was oversubscribed.

If retail investors take up the total $35 million top-up offer, chief executive Nigel Morrison says the company will be able to reduce its debt by about 27%.

He says the capital raising attracted new institutional shareholders who were waiting for its debt-to-cash ratio to decrease.