Burswood Property Trust to take over operation of casino

8/4/97

Control of the day-to-day operation of the Burswood Casino is to be taken over by the Burswood Property Trust.

Finance Minister Max Evans told Parliament today that the deal to give full control of the casino to the Trust had been arranged by the Trust, the Victoria Company Limited which currently operates the casino, and the Malaysian company Metroplex Berhad.

In December last year, the Victoria Co announced that it had entered into heads of agreement to sell its management interests in the casino to Metroplex and to lease the Burswood Hotel to Metroplex.

Neither of these agreements would go ahead.

Instead, BPT would take over control of the casino and it was expected that it would lease the hotel from the Victoria Co.

Metroplex would take an 18 per cent share holding in the new operating company, with an entitlement to hold no more than 20 per cent of the shares.

Metroplex had also indicated support for development of Stage 2 of the resort.

Subject to approval by the unitholders of BPT and the Government, the process for effecting the changes would be:

·      the Burswood Property Trust would be corporatised to create a new public company holding all the units in BPT and all the shares in Burswood Resort (Management) Limited. Existing unitholders would swap their units for shares in the new Burswood public company;

·      Metroplex would take an 18 per cent share placement in the new company and would be entitled to appoint one of the proposed 7 to 10 directors of the board of the new company; and -

·      the Casino Operation Management Agreement would be terminated and BPT would acquire the Victoria Co's 50 per cent interest in the Project Management Agreement.

Mr Evans said that the effect of the changes was to give control of the operation of the casino to the predominantly Australian owners.

The limit on foreign ownership of units in BPT was 40 per cent, although currently foreign ownership stood at 22 per cent.

The limit would be extended if necessary to allow Metroplex to hold up to 20 per cent of the shares in the new company.

At present, individual unitholders needed ministerial approval to lift their holdings above five per cent.

This limit would be raised to 10 per cent and it was expected that in time this would result in a reduction in foreign ownership as Australian shareholders, particularly institutions, lifted their holdings.

The proposed arrangements would be subject to the Gaming Commission examining the probity and financial stability of Metroplex and its principals.

Mr Evans said outside the House that changes in ownership would not affect other aspects of the casino licence or agreement.

Specifically, there were no proposals to:

·      amend the present casino tax rate of 15 per cent of gaming revenue derived from domestic or international players;

·      amend the Government's right to increase the tax rate by one per cent a year after December 24, 2000; and -

·      introduce gaming machines outside the casino.

Media contact: Hugh Ryan 481 3244