Billionaire James Packer’s Crown Resorts has dropped plans to demerger international assets, cancelled a planned Los Vegas project and sold down its holding in the troubled Macau business.
However, the company will still spin off 49% of its Australian property in an IPO.
Crown announced a $1.6 billion sale of shares in Melco Crown Entertainment, the Macau holding, to cut debt by about $800 million and return funds to shareholders.
There will be a special distribution to shareholders of $500 million and a share buy-back of $300 million.
A short time ago, Crown shares were down 1.9% to $11.37.
“These business decisions are strategic and for the long-term and will underpin the Company’s future over the next decade,” says Crown Resorts chairman Robert Rankin.
Crown Resorts has an agreement with Melco International Development, controlled by Lawrence, the son of gambling pioneer Stanley Ho, for the sale 13.4% of Melco Crown Entertainment at $US6.00 a share. Crown’s shareholding will be reduced to 14.0% from 27.4%.
A separate company had been planned to own some of the Crown Resorts’ international investments and provide exposure to the gaming markets of Macau, Las Vegas and the UK, plus a 20% interest in Nobu restaurants.
Crown Resorts today also reported further falls in revenue.
VIP program turnover at the Australian casinos was down 45% for the first 23 weeks of the financial year.
This meant a fall of about 12% in total revenue across the company’s Australian resorts.
Crown’s revenue from its Macau assets has suffered from a crackdown on how much Chinese can gamble. And 18 of its employees have been arrested on the mainland as China moves against companies marketing gambling.
Packer’s private company, Consolidated Press Holdings, has 48.2% of Crown.
Crown’s profits were down 22% to $406.2 million in 2016, dragged down by “challenging market conditions” in Macau.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.