Australia's Crown offloads Macau stake, scraps Vegas plan
Australian mogul James Packer's Crown Resorts on Thursday slashed its stake in a Macau joint venture and shelved plans for a Las Vegas casino in a scaling back of operations to cut debt.
The casino operator, which had 18 staff detained in China in October, also said it would scrap a proposal to spin off global assets.
Crown has been hurt by softening demand in Macau following a Chinese corruption crackdown and will sell 13.4 percent of Melco Crown Entertainment for Aus$1.6 billion (US$1.2 billion) to joint-venture partner Melco International.
Its shareholding in Melco Crown will fall to 14 percent after the transaction.
Ever since the 18 staff were held on suspicion of organising gambling activities overseas for rich Chinese, which is not allowed, Crown's turnover by VIPs at its Australian resorts has taken a hit.
The company has also abandoned its Alon project in Las Vegas, some two years after buying a prime site on Las Vegas Boulevard in a bid to crack the American casino market.
"Crown Resorts and its partners will begin exploring alternatives to optimise the value of their investment in Alon, including an outright sale," it said.
Given the developments, a plan announced last year to separate Crown's Australian assets from its international businesses will not go ahead.
"These business decisions are strategic and for the long-term and will underpin the company’s future over the next decade," said Crown Resorts' chairman Robert Rankin.
The demerger originally planned to lump together casinos in Melbourne and Perth, a proposed luxury resort in Sydney and Crown's gambling and online gaming operations, as well as London casino Crown Aspinalls.
The proposed new entity would have included Crown's interest in Melco Crown Entertainment, which also has assets in the Philippines, as well as the Alon site in Las Vegas.
Rankin said the savings would be used to reduce net debt by approximately Aus$800 million, with the rest returned to shareholders.
"Today’s announcements will maximise value for the benefit of all Crown Resorts shareholders, allowing us to redeploy capital to fund high-quality growth projects as well as adopting a number of capital management initiatives," he said.
"Crown Resorts has a strong portfolio of future projects, anchored by Crown Sydney, and including our online and wagering platforms."
© 2016 AFP