Crown to sell stake in Australian hotels

In a brief statement ahead of its AGM in Perth today, James Packer’s hotels and gaming giant (CWN) said its board had now endorsed an idea to strengthen its balance sheet through a split of its hotel operations.

The planned split will involve an IPO of a package of its hotels, likely including the Crown Promenade and Crown Metropol properties in Melbourne and Perth.

Its flagship Crown Towers property in Melbourne is not slated to be a part of the deal.

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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

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“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 idea was met with buoyant trading in its shares when it was first mooted to the market in June.

Crown added the IPO would require approval from state governments, the local bourse and regulators and could be aborted should market conditions take a turn for the worse.

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The group is also pursuing a demerger of its international operations independently of its hotel properties IPO

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It noted work on that element of the multi-billion dollar breakup of its operations was “ongoing”, despite concerns over the arrest of some employees by Chinese authorities.

Crown earlier this year announced plans to demerge most of its international operations from its Australian business, severing ties with the Macau gaming market that has been hit by the Chinese government’s crackdown on corruption.