Shielding domestic assets
Australian regulators have given the thumbs-up to a plan by Crown Resorts to split its domestic and international operations, a move analysts say will shield the company’s interests at home from volatile operations in Macau. The demerger plan was first announced in June 2015.
While Crown’s Aussie resorts continue to do well, the company has taken it on the chin in Macau, where a government crackdown on corruption and money laundering has led to a mass exodus of high rollers and a two-year slump in the gaming industry.
Crown owns a 27 percent stake in Melco Crown Entertainment, a joint venture that runs several casinos in Macau including Studio City, which opened last fall. Crown once owned 34 percent of MCE; a sell-off in the spring boosted Crown’s net profit after tax to $943 million for the 2016 tax year, according to Matchforecaster.com.
Splitting the business is designed to protect Crown Resorts’ domestic enterprises including casinos in Sydney, Melbourne and Perth as well as a planned $2 billion Barangaroo casino and hotel. The break-up could be finalized before the end of the year.
In a statement, Crown CEO Rowen Craigie said the response from government and regulators “has been positive.” He also reiterated the company’s long-term commitment to Macau.
