SkyCity lifts sale price of cinemas

New owners Amalgamated Holdings are expected to rebrand the cinemas within six months of taking them over. Photo / Brett Phibbs

SkyCity has boosted the final sale price of its cinema assets to Amalgamated Holdings by $2 million by including its Fiji real estate in the deal.

The casino operator yesterday confirmed the previously announced deal to sell its 113 screens to the Australian cinema operator after weeks of due diligence.

The only condition yet to be fulfilled is approval from the Overseas Investment Office.

SkyCity had previously said the sale was worth $59 million but yesterday increased it to $61.1 million.

Chief executive Nigel Morrison said the extra value had come from its agreeing to sell real estate associated with its Fiji cinema business, which was included in the sale.

Morrison said the company had been in talks to sell the real estate to another party but Amalgamated had decided it wanted the complexes too.

The deal with Amalgamated does not include SkyCity's 50 per cent stake in ticketing software company Vista Entertainment Solutions or its freehold land in New Zealand - which consists of a cinema and retail complex in New Plymouth.

But Morrison said SkyCity was also hoping to sell those assets in the next six months which would help the company realise a further $8.9 million, bringing the total to $70 million.

"We hope to have it all wrapped up by June 30."

Morrison said the proceeds of the sale were small compared to the size of SkyCity's total business but would likely be used to repay debt.

However he did not rule out a potential acquisition in the future.

Morrison said he expected Amalgamated to rebrand the cinemas within six months of taking them over.

The parties are aiming to complete the transaction by February 18.

SkyCity paid around $100 million to buy into the Village cinema business in 2001 and spent a further $50 million five years later to take full control.

It wrote the business down by $60 million in the 2008 financial year.

SkyCity rose 5c to $3.45 yesterday.