Australian casino operator Crown Resorts Ltd affirmed in a filing on Thursday it is planning a demerger of its international investments.
Thursday’s filing to the Australian Securities Exchange did not give specific details of the demerger, but stated: “Work on the proposed demerger, in particular, to obtain all the necessary approvals, consents and waivers from third parties, including from governments and gaming regulators, is ongoing.”
Crown Resorts had flagged in June that such a demerger of international holdings might take place, along with an initial public offering (IPO) of a 49 percent interest in some of Crown Resorts’ Australian hotels.
On Thursday the Australian firm also affirmed the IPO plan, which it stated was likely to include the group’s two hotel properties in Melbourne, Victoria, as well as two in Perth, Western Australia.
Crown Resorts saw its share price buffeted this week following news that 18 employees – including the firm’s head of VIP international business Jason O’Connor – had been detained in mainland China in connection with an investigation into what the mainland Chinese authorities called “gambling crimes”.
Crown Resorts – which has entrepreneur James Packer as its major shareholder – is due to hold on Thursday its annual general meeting in Perth, where the demerger and proposed IPO is likely to be discussed with shareholders.
Crown Resorts holds a 27 percent stake in Asian casino developer Melco Crown Entertainment Ltd, which has casino investments in Macau and the Philippines.
In May Crown Resorts’ wholly owned unit Crown Asia Investments Pty Ltd announced it was cutting its stake in Melco Crown to 27.4 percent, from approximately 34.3 percent.
GGRAsia approached Melco International Development Ltd – Crown Resorts’ partner in Melco Crown – and Melco Crown itself, seeking comment on the proposed demerger of Crown’s international investments in tandem with the proposed IPO for some Australian hotels controlled by Crown Resorts. No reply had been received by the time this story went online.
Crown said in its Thursday filing: “Following a detailed evaluation, the Crown Resorts board has now endorsed the implementation of a potential IPO of a 49 percent interest in some of its Australian hotels and associated retail property, which are likely to include the Crown Promenade hotels in Melbourne and Perth and the Crown Metropol hotels in Melbourne and Perth.”
The company added: “If implemented, the IPO could realise significant value for Crown Resorts shareholders, while providing the ability to maintain a majority interest in key assets within the Australian business.”
It further stated: “Such an IPO would support Crown Resorts’ ongoing capital management strategy and allow Crown Resorts to maintain a strong balance sheet and credit profile to fund existing development projects.”
Crown Resorts’ AUD2-billion (US$1.54 billion) Crown Sydney project, which is in the early stages of development at Barangaroo, in Sydney, New South Wales, has been conceived as aimed at high rollers, including Chinese players.
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”While we recognise we have more work to do, we welcome ILGA’s indication today that Crown’s reform implementation is well-advanced towards suitability to operate gaming at Crown Sydney”
Executive chairman of Australian casino operator Crown Resorts