Sydney Harbour No White Knight And Reef Casino Is Still Stranded
Sydney Morning Herald
Tuesday April 1, 1997
Sydney Harbour Casino has ruled itself out as a prospective investor in Reef Casino Trust as the troubled Cairns casino owner strives to find a white knight to rescue it from its financial woes.
Reef Corporate Services, the manager of Reef Casino Trust, and its advisers Grant Samuel & Associates, are seeking an investor to satisfy bankers' demands that Reef cut its $105 million debt by between $40 million and $50 million.
"We have considered a number of expressions of interest and, through Grant Samuel, are pursuing a number of those," Mr Barry Duke, acting chairman of Reef Corporate Services, said yesterday.
"But it's far too early to say whether we're going to be pleased with the outcome or not."
Mr Duke said the trust still planned to follow "within a week or so" the timetable that would see an investor chosen by April 29 and the deal completely settled by May 31.
All Australia's major casino owners have been rumoured to be interested in rescuing Reef at the right price but all have remained reticent as to their intentions.
Sydney Harbour Casino had not expressed any interest in Reef, a spokesman said last night.
Reef casino opened on January 31 last year and incurred a loss of $13.8 million in its first 11 months of trading.
The operators of Reef's casino and hotel have now agreed to sell their leases for a satisfactory exit price as part of the restructure.
It is understood Casinos Austria wants $19 million for the casino lease and Australis Hotels wants $6 million for the hotel lease. These are considered to be optimistic expectations.
Meanwhile, Perpetual Trustees Australia, the trustee of Reef Casino Trust, has asked that a key valuation figure be withdrawn from the Australian Stock Exchange database until the trust is restructured.
The request was made yesterday in response to a letter from the Australian Securities Commission.
The key issue is that Reef's half-year results contained a written-down value of $186.9 million for the trust's major assets but also included a statement that there could be no acceptable valuation for these assets because no reliable forecasts could be obtained.
The uncertainty over the value of the trust's assets means it was inappropriate to continue publishing a figure representing net tangible asset backing per unit (NTABPU), Perpetual concluded.
"We note that NTABPU is used for statistical purposes and quoted in ASX statistics which are published in daily newspapers," Perpetual stated.
Perpetual requested the NTABPU figure be withdrawn from Reef's details on the ASX database until after restructure.
© 1997 Sydney Morning Herald
