Casino Operator Crown Resorts Divests Assets to Reduce Net Debt

Australian hotel and casino operator Crown Resorts today announced that it had locked several asset divestment deals and that it will be using proceeds from these to reduce its debt.

Over the past year, the company has gradually disposed of its international assets in a bid to focus its attention on its domestic operations.

Crown Resorts announced earlier today that it had sold its interest in a Las Vegas Boulevard portion of land for the total amount of A$300 million. The company had previously intended to expand its footprint to the popular casino hub by building the Alon Las Vegas integrated resort. However, the project no longer matches the operator’s growth strategy, hence the sale of the plot.

Here it is also important to note that the 38-acre portion of land will be purchased by Las Vegas casino giant Wynn Resorts. The site is located right across the company’s Wynn Las Vegas casino complex.

This spring, Crown Resorts also sold its stake in its Macau joint venture with Hong Kong real estate developer Melco International Development. The company cited growing corruption crackdown in Mainland China and its pressure on Macau’s casino industry as the reason for its departure.

Last October, the company found itself in the middle of an international scandal stemming from the arrest of 19 of its employees in China for allegedly promoting gambling services to potential Chinese customers of its Australian properties. The activity is illegal in the country, and 16 of Crown Resorts’ employees were sentenced to between nine and ten months in prison following their detention.

The arrests hit the company’s domestic VIP business significantly, and it is now fervently looking for ways to improve both its reputation and profitability.

Divestment of Other Assets

Crown Resorts further announced today that it will sell two floors at the currently developed Crown Sydney integrated resort to Australian businessman James Packer for A$60 million. Here it is important to note that the casino operator is partly owned namely by Mr. Packer.

Part of Crown Resorts’ interest at New South Wales’ Ellerston will, too, be sold to Mr. Packer’s Consolidated Press Holdings Pty. Ltd and to a business entity associated to his sister, Gretel Packer. The casino company will earn A$62.5 million from the sale.

Crown Resorts is also planning to sell 4.2 million shares in its Las Vegas counterpart Caesars Entertainment Corp. The sale was valued at approximately A$54 million.

The Australian gambling operator also confirmed today that it has been in talks with online sports betting brand CrownBet to sell its 62% interest, including Crown Resorts-advanced loans for the amount of A$150 million. UK gambling operators Paddy Power Betfair and William Hill have recently expressed interest in the sports betting operator in a bid to strengthen their Australian presence amid growing regulatory challenges.

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