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JUPITERS Casino Gold Coast will receive $175 million in funding after its owner Tabcorp Holdings (ASX:TAH) rolls the dice with a demerger and a $430 million capital raising via a share issue.
Tabcorp will demerge the casino business from its wagering gaming business as it seeks to ensure appropriate capital structures in both separate, publicly listed entities.
The strong capital investment into Queensland will be known as ‘project icon’ and was mooted mid-year by the company, whose key dollar spinner is Star City Casino in Sydney. It also owns Treasury Casino in Brisbane and Jupiters Townsville.
Tabcorp chairman John Story, says the Gold Coast asset will be the major beneficiary of the demerger.
“The $175 million capital expenditure will revitalise; in fact reignite that iconic property,” he says.
Employing 2100 staff, Jupiters Hotel & Casino is the largest private employer on the Gold Coast and second outright behind Gold Coast City Council.
Wages and salaries alone top more than $100 million each year and its annual injection into the local economy in goods and services is estimated to be around $50 million.
Following $70 million worth of renovations on its hotel rooms, bars and entertainment earlier in the year, the casino was rebranded without the famous Hilton moniker after a 25-year association.
Outgoing Tabcorp chief executive Elmer Funke will remain on the board as a non executive director while Larry Mullin will be appointed CEO of the casino business and David Attenborough will head up the post demerger, overseeing the wagering, gaming and Keno business.
Tabcorp expect to implement the demerger by July 2011.
New shares will be offered through a one-for-nine underwritten entitlement offer at $6.25 each, compared to their last trade of $7.10.
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