US financial crisis hits Crown investments
These investments comprise a 19.6 per cent interest in Fontainebleau Resorts plus interests of about 4.9 per cent in Stations Casinos and 2.5 per cent in Harrah’s Entertainment.
"The impact on Crown’s profit and loss statement of these writedowns is expected to be approximately us$ 450 million," Crown said in a statement on Monday.
The decline in valuations has been precipitated by the current economic situation in the US. The decline also reflects the uncertainty regarding the future capital structure of Stations Casinos following its announcement last week concerning a proposal to its bond holders to restructure its debt.
"Although our partners in some of these investment may have differing views on their value, Crown believes its approach to be prudent in the current climate," the company added.
The company said it expects the carrying value of these investments will be reduced by about us$ 100 million, but this would not affect dividends.
"Crown has no obligation to contribute further equity to any of its minority US investments," the firm concluded.
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