Australian gaming operator Tabcorp has published a detailed booklet that sets out its plan to demerge its casino business from its sports betting, racing and non-casino gaming activities.
The new casino entity, to be known as Echo Entertainment Group Limited, will consist of the four existing Tabcorp properties Star City Casino in Sydney, Jupiters Hotel & Casino on the Gold Coast, Treasury Casino & Hotel in Brisbane and Jupiters Townsville Casino.
The entity retaining the name Tabcorp will operate the existing wagering businesses in Victoria and New South Wales, non-casino gaming machines in Victoria, keno businesses in New South Wales and Queensland, and in Victoria starting April 2012, and the Sky Racing media business.
Tabcorp shareholders will vote on the demerger on Monday, May 30. If approved, Echo Entertainment Group shares will begin trading on the ASX Monday, June 6.
All eligible Tabcorp shareholders will receive one share of Echo for each share of Tabcorp they own, at no cost, in addition to retaining their original Tabcorp shares.
Tabcorp directors are expecting “significant growth in operations” from new investments and expansion programs, including the A$960 million investment under way at Star City and the proposed A$625 million expansion of the Queensland casinos.
In 2010, the four casino properties recorded combined revenue of A$1.37 billion, EBITDA of A$360 million and EBIT of A$271 million.
The Echo board will initially consist of John Story, chairman and non-executive director; John O’Neill and Brett Paton, non-executive directors; Larry Mullin, managing director and CEO; and Matt Bekier, CFO and executive director.
At the time the demerger is implemented, it is expected that Echo will have drawn external debt of approximately A$1.09 billion and cash of approximately A$90 million.