CROWN BIDS ADIEU TO MACAU VENTURE
Aussie group sells remaining stake in Melco Resorts
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