Scientific Gaming, a Las Vegas pokies company, deliberates an Australian initial public offering and sharemarket listing. Such a step could bring the company closer to raise new funds and pay off its giant debt.
The Nasdaq-listed Scientific Games has employed Sydney-based Jarden Australia, an investment company, to run the numbers for a potential ASX (Australian Securities Exchange) listing. The company hopes to get further input into a strategic review that will help it get out of debt.
ASX seems to be one of the few options on the table for Scientific Games, but sources say it’s a serious contender. Interestingly, shares in fellow Australian gaming companies are trading at all-time highs, and Australia’s equity capital markets are open to new floats. That means Scientific Games has many options to catch some large domestic investors.
Scientific Games’ Australia appeal is not a coincidence. The company’s executive chairman Jamie Odell is a renowned and well-known Australian gaming company executive. Odell joined Scientific Games’ board last year but has a decade worth of experience running poker machine maker Aristocrat Leisure. He turned the company into one of Australia’s best-performing companies.
Another connection comes from the Sydney-based fund manager Caledonia Investments. The investment company took the lead on a consortium last year that invested US$1 billion in Scientific Games. Interestingly, Odell was also part of that action as he knew how the company operated when he was an Aristocrat shareholder.
Currently, Caledonia owns 9.8% of Scientific Games.
The connections don’t stop there. Toni Korsanos, a past Aristocrat Leisure executive, is currently utilizing her trade on Treasury Wine Estates and Crown Resorts’ boards. Korsanos is acting as Scientific Games’ vice chair at the moment.
Fund managers think the deal will be well-received, but we’ll have to wait and see whether Scientific Games will turn the Australian opportunity into a listing.
Scientific Games has seen a large change up in its board, with Odell and Korsanos joining last year. The new team is working to reshape the company’s structure and its debt-led capital. The debt is currently US$9.43 billion (approximately AU$12.18 billion). On the other hand, the company’s value is US$19.93 billion (AU$25.7 billion).
Naturally, any funds gathered at Australian IPO will help repay only a part of the pokies giant’s debt.
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