)
CROWN Resorts Limited (ASX: CWN) entered a trading halt today as it announced the sale of a $1.6 billion stake in its Macau casinos and a decision not to proceed with the Alon project in Las Vegas.
The company has also cancelled the planned demerger of its international investments. However, it will continue with the proposed IPO of a 49 per cent interest in its Australian hotel and retail properties.
The decision to sell down its stake in Melco International - Crown's business partner in China - comes after Chinese authorities arrested and detained 18 Crown employees for allegedly promoting gambling holidays for VIP clients in mainland China.
In a trading update released as part of today's announcement, Crown says the VIP program turnover in its Australian resorts over the past 23 weeks is down 45 per cent, with total revenue across the resorts down 12 per cent due to the reduction in VIP spending.
Crown will sell 198 million Melco shares for US$6 each, reducing its holding in the company from 27.4 per cent to 14 per cent in a bilateral transaction with Melco. It will also look to sell the remainder of its shares in the company and Crown majority shareholder James Packer will resign from the Melco board.
Of the $1.6 billion proceeds from the sale, $800 million will be used to pay down Crown debts, $500 million will be paid to shareholders, while the remaining $300 million will enable a share buyback.
Crown Resorts chairman, Robert Rankin, says, "These business decisions are strategic and for the long-term and will underpin the company's future over the next decade.
"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.
"Crown Resorts has a strong portfolio of future projects, anchored by Crown Sydney, and including our online and wagering platforms."
Rankin believes the transaction will enable investors and analysts to more easily evaluate the financial and operating performance of Crown's Australian assets.
The company will look to "optimise the value" of its investment in Alon, including an outright sale.
Get our daily business news
Sign up to our free email news updates.
)
)
)
)
)
