SkyCity Entertainment has been dealt a blow with a $220 million deal for its Auckland car parks set to be torn up.
SkyCity says a termination notice has been issued by MPF as the casino operator was unable to hand over the car parks to MPF by a 22 October deadline. Photo: AFP
Macquarie Principal Finance (MPF) bought the concession to operate SkyCity's 3200 car parks in Auckland in early 2019, before the facilities were significantly damaged after a fire at the International Convention Centre later the same year.
SkyCity said a termination notice has been issued by MPF as the casino operator was unable to hand over the car parks to MPF by a 22 October deadline, due to the car parks not being remediated.
MPF is owned by Australian financial services giant Macquarie Group.
SkyCity said under the terms of the agreement, it was required to take back the operation of all car parks.
Any compensation paid to Macquarie would be determined by market pricing and the process set out in the concession agreement, SkyCity told the share market this morning.
The possible collapse of the car park deal was flagged by SkyCity earlier this year.
SkyCity expected the car parks to be reacquired later this year or early next year.
The company said it was "well progressed" on options for financing the buy-back of the car park, which was forecast to contribute $15m to $20m of underlying profit per year.
The deal with Macquarie was set to run until 2048, with international car park operator Care Park originally set to operate the site on behalf of the group.
The termination of the deal occurred against the backdrop of a court battle involving the lead contractor of the convention centre project, Fletcher Building and its insurers, over who should pay up to Macquarie.
SkyCity refused to add further comment following today's announcement.