FUNDING PLAN AND EQUITY RAISING

Not for release to US wire services or distribution in the United States MARKET RELEASE SkyCity Entertainment Group Limited (SKC.NZX/SKC.AX) 17 June 2020 Funding plan and equity raising to strengthen balance sheet and enhance liquidity SkyCity Entertainment Group Limited ("SkyCity" or "the Company") (SKC:NZX/AX) today announced it has launched an equity raising ("Equity Raising") as part of a comprehensive funding plan to strengthen its balance sheet and secure additional liquidity in response to uncertainty around the impacts of Covid-19. In conjunction with the Equity Raising, SkyCity has secured the support of existing lenders by way of covenant waivers/relief, extensions to upcoming debt maturities and additional debt facilities. The funding plan effectively resets SkyCity's capital structure and provides sufficient funding capacity and headroom over the medium-term. Overview of Funding Plan o Sources of new and extended capital: o New ordinary equity of $230 million o New debt facilities of $160 million o Extension of $170 million of existing bank facilities; o Equity Raising comprises a fully underwritten $180 million institutional placement and $50 million share purchase plan; o Covenant waivers/relief secured from existing lenders (banks and US Private Placement ("USPP")) for the 31 December 2020 and 30 June 2021 testing periods; o Expect to retain investment grade credit rating (BBB-) with S&P Global Ratings; o $125 million of NZ bonds to be redeemed early in September 2020; o Pro-forma adjusted liquidity of $586 million available following the Equity Raising to meet future funding obligations; and o Suspension of future dividends until at least 30 June 2021 (i.e. for the period of covenant waivers/relief)(1). In determining its funding plan, SkyCity has been closely monitoring the recent and potential impacts of Covid-19 on its operations, financial position and outlook. SkyCity closed its properties in late March 2020 and re-opened its New Zealand properties (excl. Wharf Casino) from 14 May 2020. Adelaide Casino is also expected to re-open in late June 2020. As flagged in SkyCity's market announcement on 3 June 2020, trading since re-opening its New Zealand properties has been encouraging. However, while the outlook for SkyCity is positive, there is still uncertainty regarding the future economic environment and re-opening of international borders. Despite the impacts of Covid-19 and corresponding share price volatility over the past few months, SkyCity has always maintained sufficient liquidity to manage the short-term disruption and has not been at risk of breaching debt covenants for the 30 June 2020 testing period. The funding plan announced today has been carefully considered, taking into account the encouraging performance of the New Zealand properties since re-opening, and is structured to ensure SkyCity has an appropriate level of equity capital for the medium-to-long-term and sufficient liquidity to fund its committed investment in the two major projects in Adelaide and Auckland. In determining the funding plan, SkyCity has evaluated a range of potential funding options and different sources of capital before settling upon the optimal combination of equity and debt to appropriately capitalise the Company. Implementing the funding plan now will ensure that SkyCity has addressed its potential future funding issues before the end of the FY20 financial year and can begin the FY21 financial year with certainty regarding the Company's balance sheet position. In addition to the funding plan, additional measures have been taken to respond to the impacts of Covid-19 and to preserve liquidity, including reducing non-essential capital expenditure and minimising operating costs. As part of these measures, SkyCity has implemented a labour restructuring in New Zealand which is expected to generate around $50 million in annualised cost savings. On today's announcement, SkyCity Board Chair, Rob Campbell commented: "Over the past few months, SkyCity has faced challenges which have impacted the business and operations, particularly the disruption caused by Covid-19. Despite encouraging trading since re-opening in New Zealand, the outlook remains uncertain as we adjust to new social and economic settings. Accordingly, the SkyCity Board has resolved to increase liquidity and to provide additional financial flexibility for the business to protect against the prospect of a slower or more protracted recovery from the impacts of Covid-19. The equity raising will ensure that SkyCity remains appropriately capitalised and provides certainty to allow for the delivery of the strategic plan for the business". SkyCity Chief Executive Officer, Graeme Stephens, said: "SkyCity owns and operates leading businesses in our communities, underpinned by long-term exclusive casino licences, that are supported by predominantly local customers. The Covid-19 impact has forced us to downsize our workforce in New Zealand to reflect a reduction in international visitor arrivals and an expected weaker economic outlook, but we continue to be one of the largest private sector employers, providing thousands of jobs for a diverse range of people. The investments we make generate wide-ranging benefits for our communities and through the NZICC and Horizon Hotel project in Auckland, plus the new hotel and casino expansion in Adelaide, we will support the economic and tourism recoveries in both communities. For now, our focus is on ensuring we continue to manage our business safely and effectively through this challenging period to emerge in a strong position to capitalise on the great assets we have and the opportunities that lie ahead". Ensuring Balance Sheet Strength SkyCity is acting now to strengthen its balance sheet to improve its liquidity position and future financial flexibility. As part of its comprehensive funding plan, SkyCity has entered into binding commitment letters/agreements with its existing lenders for: o Extending $170 million of existing bank facilities maturing over the next nine months out to June 2023 and June 2024; o Arranging a new $60 million bank facility from the bank syndicate, maturing in June 2022; o Arranging a new $100 million bridging facility from Commonwealth Bank of Australia for up to 18 months; and o Securing covenant waivers/relief from the bank syndicate and USPP investors for the 31 December 2020 and 30 June 2021 testing periods. These funding arrangements are all subject to SkyCity raising new equity of $200 million (net of fees). SkyCity has agreed with its lenders to suspend future dividends for the period of covenant waivers/relief. Following the Equity Raising, SkyCity will have pro-forma adjusted liquidity of $586 million available to meet its future funding obligations. As a result, the Equity Raising is expected to provide SkyCity with sufficient liquidity and flexibility to: o Respond to a range of recovery cases, including a longer and more protracted recovery in New Zealand and Australia and/or further Covid-19 disruptions; o Fund future operating costs, working capital and capital expenditure requirements; o Manage current debt facilities, including early redemption of the NZ bonds in September 2020 and (if not refinanced) repayment of US$100 million of USPP notes maturing in March 2021; o Retain its BBB- investment grade credit rating with S&P Global Ratings; and o Recommence dividends after the end of covenant waiver period, with the Board to review the dividend policy in FY21. Strong Underlying Business SkyCity has a resilient business which can recover quickly from economic shocks, as shown again by recent trading since re-opening its properties in New Zealand. As a result, despite the challenging operating conditions over the past few months, SkyCity's long-term fundamentals remain strong due to the following factors: o Own and operate leading local businesses with long-dated exclusive casino licences in attractive gaming markets; o Have a strong platform to benefit from the expected recovery in the gaming, tourism and hospitality sectors in a post-Covid-19 environment; o Historically stable and defensive earnings which have recovered quickly from previous economic shocks; o Medium-term earnings and free cash flow growth underpinned by major projects in Adelaide and Auckland; o Significant investment in property assets with around $2 billion of property assets owned as at 31 March 2020; o Opportunity to become a multi-channel gaming operator with integrated online and land-based gaming; and o Sustainable business over the long-term due to ongoing investment in corporate social responsibility and sustainability initiatives. Mr Stephens said "SkyCity's intrinsic value is underpinned by its long-term exclusive casino licences in New Zealand and South Australia and its significant investment in property assets, particularly at its flagship property in Auckland. We have built a strong platform to manage the challenges associated with Covid-19 and to fulfil our future potential. SkyCity's strategic plan remains relevant today with an immediate focus on managing the post-Covid-19 recovery and completing the major projects in Adelaide and Auckland. Our team is focused on the task at hand and excited about the opportunities that lie ahead." Updated FY20 Earnings Guidance Following the recent re-opening of its New Zealand properties and the imminent re-opening of Adelaide Casino, SkyCity is now comfortable reinstating earnings guidance for FY20. SkyCity currently expects Group normalised EBITDA to be in the range of $185-205 million and Group reported EBITDA(2) to be in the range of $440-480 million. SkyCity also expects Group normalised NPAT to be in the range of $52-67 million and Group reported NPAT(2) to be in the range of $330-360 million. In addition to Covid-19, reported results during the period have been impacted by other significant events, such as the NZICC fire and Auckland car park concession sale, thereby limiting comparability with prior periods. SkyCity expects to partially impair the investment in Adelaide Casino in the FY20 financial statements exacerbated by the impacts of Covid-19. The impairment will be a non-cash charge which will reduce Adelaide Casino's intangible asset value (casino licence) of A$283 million. The assessment of a potential impairment is ongoing and remains subject to Board and auditor review. Equity Raising Summary SkyCity is conducting an Equity Raising comprising a $180 million institutional placement ("Placement") and a $50 million share purchase plan ("SPP"), sized to reflect the composition of SkyCity's share register as at 16 June 2020. Both the Placement and the SPP are fully underwritten and the Equity Raising has been structured with the objective that existing shareholders have the opportunity to receive at least their pro-rata portion of new shares being offered. The Placement will be conducted through a bookbuild in which institutional and other select investors in New Zealand, Australia and other jurisdictions will be invited to participate. The Placement has been underwritten at a fixed price of $2.50 per share, which represents a 6.4% discount to the last close price of $2.67 per share on 16 June 2020 and a 10.4% discount to the 5-day volume weighted average price ("VWAP") on the NZX of $2.79 prior to today's announcement. A trading halt has been granted by NZX and ASX to facilitate the Placement. SkyCity has received pre-commitments from a number of institutional shareholders for a total value exceeding the size of the Placement. Further, each of SkyCity's directors has committed to participate in the SPP. SkyCity intends to offer the SPP to eligible existing shareholders with a registered address in New Zealand and Australia, enabling them to subscribe for up to $50,000/A$47,000 of new SkyCity shares. The SPP offer size is $50 million (with no oversubscriptions) and the offer price of these shares will be the lower of the Placement offer price and a 2.5% discount to the five-day VWAP of SkyCity shares traded on the NZX during the last five days of the SPP offer period. If scaling of the SPP is required, it will be done with reference to the shareholders' existing shareholdings at the record date of 16 June 2020 and otherwise at SkyCity's discretion. SkyCity considers that the SPP will cater for almost all of SkyCity's non-institutional shareholders, enabling them to participate and potentially increase their relative percentage holdings in SkyCity. The final terms of the SPP will be announced on 22 June 2020. An SPP booklet, together with an application form, will be sent to eligible shareholders on 22 June 2020 and will be available on the website established for the SPP on the same day. The closing date for applications by eligible shareholders is Friday, 3 July 2020. Eligible shareholders wishing to acquire new shares under the SPP will need to complete the application form or apply online via the website. Eligible shareholders may apply for up to $50,000/A$47,000 of shares. The new shares to be issued under both the Placement and the SPP will rank equally in all respects with SkyCity's existing ordinary shares. Key dates relating to the Placement and SPP are set out in the appendix to this announcement. Investor and Analyst Conference Call SkyCity will host a teleconference call at 12.00pm noon NZT (10.00am AEST) today for investors and equity analysts to discuss the funding plan and Equity Raising. The duration of the call is expected to be around one hour and there will be a brief opportunity for questions at the end of the call. Conference details for the call are set out in the appendix to this announcement. (1) The Board intends to review SkyCity's dividend policy during FY21 and to recommence the payment of dividends as soon as possible after the waiver period. (2) FY20 guidance for reported earnings is stated before any potential impairment of the investment in Adelaide Casino, but includes updated estimates for damage to and reinstatement costs for the NZICC and Horizon Hotel arising from the NZICC fire. ENDS For more information, please contact: Investors and analysts - Ben Kay General Manager, Corporate Development & Investor Relations DDI: +64 9 363 6067 E-mail: ben.kay@skycity.co.nz Media - Liza McNally Chief Marketing Officer DDI: + 64 9 363 7137 Mobile +64 2194 4989 E-mail: liza.mcnally@skycity.co.nz This market announcement has been prepared for publication in Australia and New Zealand and may not be released to US wire services or distributed in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. End CA:00354809 For:SKC Type:CORPACT Time:2020-06-17 09:28:22