SkyCity Entertainment Group is to sell its entire 10% stake in Gaming Innovation Group (GiG). After legal costs and brokerage fees, the net proceeds from the sale will be up to NZ$55 million (US$33 million).
SkyCity has been told to "sign an unconditional agreement" to sell all its shares in the European online gaming platform and services provider.
The shares are not part of the group's core business and are therefore "not considered strategically necessary". The proceeds from the sale will be used to repay existing debt as part of the group's capital management plan.
However, SkyCity insists that its relationship with GiG remains valuable by operating the SkyCity online casino in Malta. SkyCity originally acquired a stake in GiG in April 2022 for approximately NZ$40 million.
SkyCity Casino Management has been criticized after it was found to have breached New Zealand's Anti-Money Laundering and Counter-Terrorism Financing Act during operations between 2018 and 2023.
SkyCity Adelaide is also being investigated by the Australian Transaction Reports and Analysis Center (AUSTRAC) for "serious and systematic breaches of anti-money laundering and counter-terrorism financing laws". The company was later fined $67 million by the Federal Court as further investigations resumed.
These legal cases and fines have undoubtedly put some pressure on the Group, forcing it to make adjustments, especially in terms of capital management.
