KEY POINTS:
SkyCity Entertainment continues to sharpen its focus on its casino interests with the sale of its stake in a hotel opposite Christchurch Casino.
SkyCity and the casino's other major shareholder, Skyline Enterprises, have sold their interests in the Crowne Plaza Christchurch hotel to an Australian private investor Eureka Funds Management for $61.5 million.
In a separate but related deal, SkyCity and Skyline will raise their stakes in Christchurch Casino to 46 per cent from 41 per cent.
The remaining shares are held by a private South Island investment company.
The extra casino shares were picked up from the operator of the Crowne Plaza, InterContinental Hotels Groups, via its interest in Premier Hotels, a casino stakeholder.
SkyCity chief financial officer Alistair Ryan said there would be a "healthy" cash surplus following the deal.
"The price itself was agreed last year so we're pleased we've been able to retain that price given the trends in the funds and property market.
"From our point of view it gives us an increased stake in a core casino asset and our position in the hotel is less core. The important thing is we've been able to free up cash and increase our position in Christchurch Casino," Ryan said.
Both transactions remain subject to certain conditions, including Overseas Investment Office approval.
Forsyth Barr analyst Jeremy Simpson said: "It looks like quite a good deal. It's definitely a positive - their focus is casinos."
Eureka and IHG say the 298-room Crowne Plaza Christchurch will continue to operate under IHG management under the Crowne Plaza brand.
Eureka Funds is a boutique business formed in January 2004 to manage property investments for a small number of institutional investors.
SkyCity's share price closed up 7c to $3.58 yesterday.
