he on-paper write down comes nearly three weeks before the release of Crown’s half year results, prompted by the US-based Stations Casino releasing plans on its proposal to restructure its debt.
Crown, Australian largest entertainment and gambling company, said it believed that its 19.6% stake in Fontainbleu Resorts in addition to its 4.9% and 2.5% stakes in Stations Casinos and Harrah’s Entertainment would now be worth around us$ 100 million.
Crown had bought its 19.6% stake in Fontainebleau Resorts for us$ 250 million in April 2007. Fontainebleau plans to build a 3,889-room hotel and casino on a 24.5-acre site just north of the Riviera, with an opening planned for late 2009. Crown also paid us$ 242 million for its stake in Station Casinos.
This is second write down in the last 6 months on its US investments following a us$258 million write down in August 2008. Crown said that the write down was a consequence of the continued global financial crisis. "The decline in valuations has been precipitated by the current economic conditions in the US," the company said. "Although our partners in some of these investments may have differing views on their value, Crown believes its approach to be prudent in the current climate."
Crown said it has no obligation to contribute further equity to any of its minority US investments. The firm said its audited results for the half year ended 31 December 2008 would be released on 27 February.