Crown considers outside sources to fund Las Vegas project

Crown considers outside sources to fund Las Vegas project

Tuesday, August 18, 2015 Totally Gaming
James Packer has retained control of the Alon integrated resort

James Packer, who quit as head of Crown Resorts last week, is believed to be considering third-party equity to fund the gaming company’s Las Vegas project of which he remains co-chairman.

Packer was replaced as chairman of the Australian operator by Robert Rankin following poor FY2015 results that saw profits down 41.3 per cent at AUS$385.05m (€254.9m/$282.6m).

However, Packer remains the major shareholder in Crown and retains positions as co-chairman of both Melco Crown Entertainment and the Las Vegas Alon Resort - a 1,100-room project to be built on a vacant 34.6-acre site.

As Crown last week reported that its net debt had risen 47 per cent to $2.5bn, The Australian newspaper reports that Packer is considering whether extra equity funding, which could come from either a strategic or institutional investor, could see Crown’s stake in the $4bn Alon project fall from its current level of about 73 per cent.

Crown’s move to fund the integrated resort via project financing rather than on its own balance sheet is in line with its previous strategy in developments which it does not own outright, with the company partnered by Oaktree Capital Management and former Wynn Las Vegas president Andrew Pascal on the Alon project. Crown already runs integrated resorts in Macau, The Philippines and various Australian cities.

Meanwhile, Crown has acquired a 60 per cent stake in US social gaming developer DGN Games for $27.5m and is set to make a $5m cash injection to aid its future growth strategy.

“It’s early days for us, but we think the social gaming space is a relatively high growth market,” said Crown chief financial officer Ken Barton.

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