SkyCity unable to issue dividends in 2022

By William Brown Updated
SkyCity unable to issue dividends in 2022

SkyCity Entertainment group said it is unable to issue dividends to shareholders for the remainder of 2022 after securing an extension to debt covenant relief for the June 2022 and December 2022 testing periods.

Inside Asian Gaming reports that SkyCity revealed it has secured debt covenant waivers from its banking syndicate and US private placement holders for the 30 June 2022 testing period, and an amendment to debt covenants for the 31 December 2022 testing period.

However, the company will be unable to make dividend distributions to shareholders for the duration of these testing periods under the new agreements, noting that it will resume distributions as soon as it is able to do so.

Explaining the reasons for seeking further debt covenant relief, SkyCity said, “Despite recent improved performance, SkyCity has secured this further covenant relief as a matter of prudence to provide the Group with contingency in the event of a further material disruption of the near-term operating environment due to COVID-19.

“SkyCity is appreciative of the continued support from its financiers as it navigates the impacts of COVID-19 disruptions on the Group.”

SkyCity said it remains unable to provide detailed earnings guidance for FY22 but remains positive on its medium-term outlook.

In April, New Zealand reopened its borders to fully-vaccinated Australians, while international arrivals from nations subject to New Zealand’s visa-waiver program, including the United States, United Kingdom, Singapore, Japan, South Korea and most of Europe, have been allowed entry since 1 May.

Two Star directors plan to step down

Two directors at embattled casino operator Star Entertainment have flagged their intention to resign.

According to an ASX announcement after another week of damaging public hearings, which are part of a regular review of Star’s suitability to retain its casino licence for The Star Sydney, non-executive directors Sally Pitkin and Gerard Bradley will both stand down in the coming months.

Pitkin will step down “by the end of the financial year” and Bradley “in the coming months”, the announcement said.

Having largely dodged scrutiny in recent years while Crown endured an inquiry in NSW, home to Crown Sydney, and Royal Commissions in Victoria and Western Australia, home to Crown Melbourne and Crown Perth, Star now finds itself treading a familiar path as it fights to save its reputation.

The company has already farewelled its managing director and CEO Matt Bekier, with chairman John O’Neill stepping in as interim executive chairman, while senior executives Harry Theodore, Greg Hawkins and Paula Martin tendered their resignations.

Likewise, Crown saw 10 of its 11 directors depart in the six of six months.

Recognising the similarities, one source said “it’s hard to see the current Star board remaining and I think they have made a mistake appointing John O’Neill.

“That looks a lot like Helen Coonan, which was not well received by the Victorian Royal Commission. I can’t believe Star hasn’t seen that.”

Star said it “notes the evidence in relation to Board renewal given in the public hearings in connection with the review of The Star Sydney being undertaken by Adam Bell SC.

“As advised on 1 April 2022 in announcing the appointment of interim executive chairman John O’Neill, the Board acknowledged the need for accelerated Board change and would embark on a program of renewal in a timely manner. The Board is also mindful of the need for stability in this transitional period.”

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