Mia Gardner | 07 Feb 2018
The sale, which is to be processed for $370 million, is the latest in a long line of disinvestments made by Crown Resorts over the past year. According to the company, its ultimate goal its to ‘re-align’ its business interests and its focus, a strategy which also saw it selling its once highly successful CrownBet division for $150 million.
It has been a time of great upheaval for many Australian operators, including Crown Resorts, who recently ended their long-term business partnership with Melco back in mid-2017. Also around this time, 18 of the company’s employees were detained and trialled by authorities in China due to accusations of illegally promoting gambling in the Communist state.
The employees were only released from Chinese detention cells months later, following continuous pressure from the Australian government. However, immense damage was done to Crown Resorts’ reputation in the process, leading to the operator suffering a few months’ worth of slow revenue streams as a result.
Crown Resorts CEO James Packer has also pressured into admitting to shareholders at a recent meeting that the company had not to date been successful in its attempts to expand internationally. Packer cited the Chinese detention saga as one of the primary causes of the failure.
The now-divested, 14 hectare section of land in Las Vegas, which was where Crown had planned to construct a casino, has now been purchased by a Wynn Resorts subsidiary. The Australian firm has also revealed that it lowered the carrying value of its investments in its Vegas-based subsidiary, Alon, to just $200 million last year.
Crown Resorts has since confirmed that it will receive around $325 million from the proceeds of the land sale. Its majority-owned subsidiary company, Alon Las Vegas Resort LLC, will reportedly receive the remaining funds to power new acquisitions and expansions.
Furthermore, Crown is now set to turn its full attention back to its local Australian operations, concentrating the bulk of its efforts in capital cities like Sydney, Melbourne and Perth.