CROWN BIDS ADIEU TO MA­CAU VEN­TURE

Aussie group sells re­main­ing stake in Melco Re­sorts

New Straits Times - - Business -

SYD­NEY/HONG KONG

AUS­TRALIA’S Crown Re­sorts Ltd quit its re­main­ing stake in Ma­cau-fo­cused Melco Re­sorts and En­ter­tain­ment Ltd for US$1.16 bil­lion, end­ing a fraught off­shore ex­pan­sion and free­ing up cash for new projects at home.

The big­gest listed casino firm out­side China has been re­treat­ing from a decade-long foray into the global gaming hub since 18 staff were ar­rested for “gam­bling crimes” in China last Oc­to­ber amid a broader crack­down on cor­rup­tion.

Its fi­nal exit from the one-third stake it held in Melco a year ago al­lowed the com­pany to fo­cus on new projects in Syd­ney and Perth.

Crown has booked a loss on joint ven­tures in­clud­ing Melco ev­ery year since 2010, ac­cord­ing to Thom­son Reuters data.

“The is­sue of the ar­rests has... been a ma­jor fac­tor in terms of con­sid­er­ing what’s best for the fu­ture,” said An­gus Gluskie, a port­fo­lio man­ager at White Funds Man­age­ment, which owns Crown shares.

“I think they just wanted to step com­pletely clear of any­thing to do with that mar­ket.”

Melco said in a state­ment it would buy the Crown shares for a to­tal US$1.16 bil­lion (RM5 bil­lion).

Crown shares were up one per cent yes­ter­day while the broader Aus­tralian share mar­ket fell 0.5 per cent.

Af­ter plung­ing 14 per cent the day the com­pany dis­closed the ar­rests in Oc­to­ber, the shares only re­turned to their pre-ar­rest level last month.

In a state­ment to the stock ex­change, it said it would use the sale pro­ceeds — to­talling US$987 mil­lion af­ter un­wind­ing eq­uity swaps as­so­ci­ated with the joint ven­ture — to cut debt.

“I don’t think there’s an ur­gency in terms of cut­ting down their debt ra­tios, but they do have some pretty sig­nif­i­cant cap­i­tal ex­pen­di­ture in the pipe­line, par­tic­u­larly with Crown Syd­ney,” said Vicky Mel­bourne, a se­nior direc­tor at Fitch Aus­tralia, which has Crown with a “BBB” credit rat­ing with a sta­ble out­look. Reuters

BLOOMBERG PIC

The Stu­dio City casino re­sort in Ma­cau de­vel­oped by Melco Crown Ltd.

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