Crown Resorts reported Monday that it had secured a new credit facility. Discussions with Oaktree Capital Management in the United States ended Monday over a proposal of A$3.1billion ($2.3billion) to enable the casino operator to purchase out James Packer.
The company stated that “Crown has ceased all discussions with Oaktree” after it announced a net loss (A$261.6 million) for the year ended June 30. This was in contrast to the profit of A$79.5m in the previous fiscal year due to pandemic-induced closings of its casinos. Oaktree had offered Crown funds to Packer in June.
Crown announced that it had reached a deal with creditors to extend maturity dates on some A$560million in bilateral facilities until October 2023. The lenders also agreed not to enforce certain financial covenants beyond December 31, 2021.
Crown has said that it will not declare an interim dividend for December 31 as part of an arrangement with its creditors. The company didn’t announce a final dividend in the year that ended June 30. “Future dividends are subject to the board’s assessment of Crown’s financial position.”
Crown stated that its total liquidity was A$560.8million as of June 30, including A$390.1million of cash and A$170.7million of committed undrawn credit lines. Crown has also secured a new A$250m loan facility. This should be sufficient to cover particular circumstances, including the redemption of Crown’s euro medium-term notes.
Oaktree was the most recent potential investor to leave Crown due to tax evasion allegations and money-laundering accusations in Australia. Star Entertainment Group canceled a merger plan with Crown last month.
Star released a statement last week saying that the Victoria’s Royal Commission into Crown Melbourne has the potential to impact Crown’s value significantly. Star also stated that the Melbourne casino license is being retained and the conditions under which it was maintained.
Crown, which already hasn’t been granted the permit to open its Sydney casino, would suffer a severe blow if it loses the Melbourne casino license. Crown has been deemed unfit for the management of its Melbourne casino by regulators. This is because the Crown failed to address money-laundering issues and hidden potential tax underpayments.
Crown also stated that there are uncertainties due to ongoing regulatory investigations in Australia. However, Crown claimed that its earnings outlook would continue to be clouded with pandemic-induced travel restrictions.
James Packer arrives at the Crown Resorts annual meeting in October 2017.
Crown’s largest shareholder, Packer, is the largest shareholder after he took over the legacy of Kerry, his father. In March 2018, he left the company’s board. Four months later, he quit the board of Consolidated Press, his family holding company. Australia’s number 15 diplomat, Packer, is 53. according to the April World Billionaire’s List publication, $3.2 billion was the net worth of the wealthiest person.
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