BANK PUTS ‘FOR SALE’ SIGN OVER
A WEAKENED CASINOS AUSTRIA The Austrian National Bank is assessing the sale of its shares in domestic operator, Casinos Austria, but recent valuations of the business have not proved favourable
Austria’s National Bank has made clear its intentions to sell its 33 per cent shares in Austria’s domestic casino operator, Casinos Austria (CASAG), a business that has previosuly been valued at €1bn. However, recent appraisals of Casinos Austria’s business has estimated that the current value of the company is less than half that amount, valuing the National Bank’s shares at a maximum of €140m.
Amongst a series of complicated share options and issues relating to the sale of the shares, some of the largest remaining shareholders in Casinos Austria have also expressed their intentions to sell. Pew Schelhammer & Schattera (5.31 per cent) have stated they want to exit the gaming sector, Church bankers have made their stance clear and the MTB Private Foundation (16.79 per cent) of the 86-year-old Maria Theresia Bablik, also has exit ambitions.
The CASAG group’s turnover in 2013 was €3.5bn, of which the lotteries contributed three billion. The
foreign subsidiary CAI was still in the red in the first half of 2014, despite the efforts of CEO Karl Stoss to stem the losses and limit the damage. The exit from the Greece’s Casino Loutraki near Athens also impacted earnings in 2014.
Casinos Austria and the majority owner of the Loutraki, Vasanta Holdings, settled a disputed put- option with a compromise payment of €30m, after the Greek company had called for €49.5m to be paid to settle the case. The dispute arose when CAI, having built a casino in Belgrade (Grand Casino Belgrade) sold the location for €42m to Club Hotel Loutraki. In return, CAI agreed to increase its participation in Loutraki to around 16 per cent. After much dispute, CAI has honoured the legally binding aspect of this agreement with the €30m payment.
Combine this news with the recent failure of Casinos Austria to secure a new concession in Vienna and Lower Austria - a decision that CASAG has appealed against - and the decision by the government to make the sale of the National Bank’s shares in CASAG a priority could have major consequences. The question is whether an entry from a pure financial investor would be viable or if, as is being discussed, the Novomatic Group would find the deal of interest?
Insight AUSTRIA & GERMANY
Germany The casino at Frankfurt airport has terminated its contract with the City of Frankfurt for financial reasons as visitor numbers and revenues in 2014 have fallen to unsustainable levels. The franchise fee paid to the city of Frankfurt fell in 2013 to €23,000 - almost half the sum paid in 2012 (€43,000), indicating a substantial fall in operating revenues. The casino has been in operation within the transit area of Frankfurt airport for 14 years, opening in 2000 as the world’s second only airport casino. Measuring just 150sq.m. the location at Terminal 1 Departures housed American roulette and blackjack tables in addition to 45 slot machines. The casino’s nine employees have been informed of the decision to close the casino and have received letters of termination of employment. Germany Having received its building permit for the Merkur casino in Leuna-Gunthersdorf the operating company, Mercury Casinos Saxony-Anhalt, has now officially received approval for the operation of public casinos in Saxony-Anhalt, according to the the Ministry of the Interior and Sports of the State of Saxony-Anhalt.
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