CROWN EXITS MACAU TO PAY DOWN DEBTS
9 May 2017, Written by Paris Faint
IT HAS been just over five months since Crown Resorts (ASX: CWN) offloaded a significant stake in Melco Resorts & Entertainment in Macau, and now James Packer's casino giant has announced it will be selling off its remaining interest in the company.
Crown Resorts subsidiary Crown Asia Investments (CAI) has entered into a repurchase agreement to sell back the rest of its 165.3 million Melco Resorts ordinary shares for a price of US$7.04, in a move to pay down its debts and shift focus toward its parent's operations in Australia.
In a statement released to the ASX, Crown Resorts stated it will no longer hold any interest in Melco and non-executive director Robert Rankin, who was appointed to sit as Crown's rep on the Melco board, will resign from the role.
On completion of the repurchase agreement in Macau, a separate shareholders' agreement between CAI and Melco relating to the market in Japan will also terminate.
After reducing its debts initially, Crown is expected to bolster home-soil assets including its casinos and hotels in Perth, its luxury development at Sydney's Barangaroo and the Queensbridge hotel tower in Melbourne.
Crown first started selling off its Melco assets in October last year after Chinese authorities arrested and detained 18 of its employees for allegedly promoting gambling holidays for VIP clients in mainland China.
The CWN share price dropped from more than $12.33 to less than $9.72 during that same month.
In late April 2017 Crown shares fully recovered from the hit, and are currently trading up by 1.28 per cent at $12.66.
Business News Australia
Author: Paris Faint