PM's stance helps boost SkyCity shares

John Key is not ruling out funding SkyCity convention centre cost overruns. Photo / Richard Robinson

SkyCity Entertainment Group's shares rose after Prime Minister John Key wouldn't rule out using taxpayer cash to fund budget over-runs during construction of the company's controversial convention centre.

The casino and hotel operator's stock lifted 13c, or 3.5 per cent, to close at $3.90 last night.

Key yesterday questioned the wisdom of insisting SkyCity stick rigidly to its $402 million budget for constructing the central Auckland convention centre.

"I'm keen to see the best convention centre I can for Auckland, because this is a very long-term asset, so I would hate to see some sort of eyesore constructed downtown."

A deal was reached between SkyCity and the Government in July 2013 for the casino firm to spend $402 million to build and operate the convention centre in return for legislation allowing the company to operate additional gambling tables and machines and extending its gambling licence to 2040.

In December SkyCity managing director Nigel Morrison said cost overruns and "design improvements" had increased the bill to between $470 million and $530 million.

Trading ahead of SkyCity's half-year financial result, which the company will report today, may have also influenced yesterday's share price gains.

"Those comments in the press [from Key] could have an impact on the fringes," said Mark Lister, of Craigs Investment Partners. additional reporting Nicholas Jones