International edition
September 22, 2020

Crown still retains a 24.5 % stake in the Cannery casino group

Packer won't gamble on the US after US$ 3 billion punt goes wrong

(US / Australia).- Crown executive chairman James Packer has ruled out an imminent return to the US gaming market in the wake of the group's disastrous US$3 billion expansion into the US before the onset of the global financial crisis.

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rown still retains a 24.5 % stake in the Cannery casino group, which operates three casinos in Las Vegas and the Meadows racetrack casino in Pennsylvania, The Australian reports.

But it has heavily written down the investment after extricating itself from a full US$ 1.75 billion Cannery buyout in March 2009, by reworking the terms of the deal with the group's private equity owners.

"I have had a bad experience in the US, so I am not rushing to go back," Packer said in an exclusive interview with The Australian.

"Crown is not a company looking to issue fresh equity and we are already spending more than our profits on our capital expenditure program. That means there is a limit to what you can do."

In addition to Cannery, Crown took stakes in US casino giants Harrah's Entertainment and Stations Casino Group, which it was subsequently forced to write down.

It also has a 1 % stake in Canadian group Gateway Casinos & Entertainment, which was also written down.

In 2009 it shut down its Las Vegas corporate offices after abandoning plans to build a US$ 5.5 billion Crown Las Vegas casino and hotel complex with private equity partner York Capital Management and Chris Milam, a Texas property developer.

He now holds a 43 % stake in Crown, the owner of the Crown casino in Melbourne and the Burswood Casino in Perth, after last October spending more than US$ 200 million to increase his interest.

Crown last month received approval from regulators in Nevada and Pennsylvania to proceed with its investment in Cannery. The interest is valued on its books at US$ 60 million.

While the Cannery properties continue to record falling revenues, they are generating earnings. Packer said Crown was committed to the investment.

"We have written it down and having recently received all requisite regulatory approvals. We will now work with that company going forward," he said.

 

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