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Australia's Crown Resorts warns of revenue fall, plans to quit demerger
[SYDNEY] Australian casino company Crown Resorts Ltd said first-half revenue would fall 12 per cent due to a slump in turnover from VIP gamblers, and announced plans to raise A$1.6 billion (S$1.7 billion) by selling shares in Melco Crown Entertainment Ltd.
Sydney-listed Crown also said in a regulatory filing on Thursday that it was cancelling a planned demerger of its international assets, although it would still spin off a 49 per cent stake in some Australian hotel properties.
Australia's biggest casino operator, 53 per cent owned by billionaire James Packer, said it will cancel plans to develop a casino development project in Las Vegas as part of a broader strategy overhaul.
The plan would "maximise value" and allow the company to "redeploy capital to fund high-quality growth projects, as well as adopting a number of capital management initiatives," Crown chairman Robert Rankin said in the statement.
Crown said it will sell Macau-based Melco Crown shares back to that New York-listed joint venture, nearly halving its holding to 14 per cent from 27.4 per cent.
Crown will use the proceeds of the Melco Crown sale to cut debt by about A$800 million, give shareholders a special distribution of A$500 million and spend A$300 million on a share buyback.
The forecast revenue slump in the six months to end-December was led by a 45 per cent decline in VIP turnover at the company's Australian resorts, the company said. Its first-half results are not due to be released until February 2017.
VIPs refer to wealthy gamblers, largely Asian tourists, who travel to Australia as part of pre-arranged tours.
In November, Crown said 18 of its staff were detained in China for suspected "gambling crimes". Gambling is illegal in China.
Crown shares were in a trading halt on Thursday.