Crown Resorts plans float of hotels
Its share price might have tanked this week after Chinese authorities detained 18 of its staff but Crown hoped it had good news for shareholders yesterday when it announced it is pushing ahead with the float of its hotels.
Crown yesterday told the market its board had endorsed the float of a 49 per cent stake in its Australian hotels business.
The float would take in such properties as its Crown Promenade hotels in Melbourne and Perth and the Crown Metropol hotels in Melbourne and Perth.
The Crown Towers hotel in Melbourne will not be part of the float.
“If implemented, the IPO could realise significant value for Crown Resorts shareholders while providing the ability to maintain a majority interest in key assets within the Australian business,’’ Crown said.
“Such an IPO would support Crown Resorts’ ongoing capital management strategy and allow Crown Resorts to maintain a strong balance sheet and credit profile to fund existing development projects.”
The IPO, which still needs approval from third parties such as state governments, regulatory bodies and the ASX, is all part of a broader plan to spin off Crown’s international casino interests.
But investors weren’t impressed and sent the Crown share price down 2.273 per cent to $10.75 after Crown told shareholders at yesterday’s annual meeting not to cash in their chips over the company’s problems in China.
Crown shares are down 17 per cent from their closing price on October 14 before news of the detentions.
Chairman Robert Rankin said it would be “both premature and speculative” to assess whether China’s moves would have a material impact on the company,
China’s crackdown has raised market concerns that stopping Chinese high rollers would affect the viability of Crown’s plan to build a major new hotel and casino complex at Barangaroo on Sydney’s waterfront.
Not so, according to Mr Rankin. He said the development would become an “iconic part of Australia’s tourism landscape.”
To find out more on the Crown click here: https://www.crownmelbourne.com.au & https://www.crownperth.com.au.
by Leon Gettler, October 21st 2016
