SkyCity Entertainment Group, New Zealand's only listed casino, has signed a deal with the South Australian government on preliminary works to prepare for the expansion of its Adelaide casino and the wider redevelopment of the site.
The work is expected to take place in the second half of the calendar year and the costs will be split between the company and the state. It will include modifications to Festival Drive, work on the structural piling, modifications to loading docks and the relocation of existing services.
SkyCity is planning to spend A$300 million to overhaul its Adelaide Casino with new restaurants, a hotel, and new VIP gaming areas. In November last year, former chief executive Nigel Morrison apologised to shareholders at its annual general meeting for the casino's poor performance, which he blamed on fundamental problems including the lack of a car park, a hotel for high-rollers and a critical mass of restaurants to tempt people to the area.
Interim chief executive John Mortensen said the deal was an important step: "We're delighted that we've got agreement on the first phase of work on what will be an amazing rejuvenation of the Riverbank Precinct. SkyCity's Adelaide Casino expansion will bring high-net-worth visitors to South Australia, providing a significant boost to the tourism industry".
The South Australian government has also signed a deal with the Walker Corporation to develop the nearby Festival Plaza. A car park, retail precinct and office space are to be built over the next three years.
SkyCity is currently going through a capital raising to fund the development in Adelaide and a new conference centre in Auckland. It raised $180 million from institutional investors earlier this month, with an offer to retail investors scheduled for June 7.
Shares in SkyCity were unchanged at $4.68. They've risen 6.8 percent since the start of the year.