Australian casino operator Crown Resorts Limited has announced that it expects to receive around $1 billion after agreeing to sell off its remaining stake in the Asian gambling and entertainments joint venture it had run with Hong Kong-based Melco International Development Limited.
Previously known as Melco Crown Entertainment Limited before officially changing its name last month to Melco Resorts And Entertainment Limited, the Hong Kong-listed joint venture was established in 2004 and is responsible for the City Of Dreams Macau development alongside the Studio City Macau and City Of Dreams Manila venues. Melbourne-based Crown Resorts Limited offloaded an initial 13.4% stake in the enterprise to Melco International Development Limited last year while subsequent sales have seen its interest in the casino-operating enterprise dwindle to only 11.2%.
As part of the deal, Crown Resorts Limited revealed that it will additionally sever its arrangement with Melco International Development Limited to jointly develop an integrated casino resort in Japan and now intends to bid for the right to open a gambling facility for the island nation on its own.
“Despite our positive history with Crown [Resorts Limited], I made the strategic decision to terminate the joint venture arrangement and allow Melco [Resorts And Entertainment Limited] to pursue Japan alone,” read a statement from Hong Kong billionaire Lawrence Ho Yau Lung, Chairman and Chief Executive Officer for Melco International Development Limited.
This final sale follows October’s arrests of 18 Crown Resorts Limited employees in China for “gambling crimes” and the firm’s subsequent decision to exit the Macau casino market in order to concentrate on domestic projects in the cities of Sydney and Perth. These arrests were devastating for the Australian firm as it saw its half-year VIP revenues subsequently drop by 45% year-on-year while its overall adjusted profits declined by 9.1%. It is moreover facing a class-action lawsuit being brought by a group of investors seeking compensation and arguing that the casino operator should have notified them about the risks associated with its strategy well before the arrests.
The Crown Resorts Limited workers still being detained in a Shanghai detention facility include three Australian citizens in Jason O’Connor, Jerry Xuan and Pan Dan alongside Malaysian Alfread Gomez while the Sydney-listed firm has more recently reshuffled its board and instituted an “efficiency drive” that could ultimately lead to job cuts.
Melco Resorts And Entertainment Limited is moreover responsible for the Altira Macau venue while Crown Resorts Limited explained that it intends to use the proceeds of this latest sale to reduce its net debt.