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Crown retreats from Macau

AAP logoAAP 14/12/2016 Trevor Chappell

Casinos giant Crown Resorts has dumped plans to spin off its international assets and again cut its stake in its Macau joint venture in what appears to be a retreat from the Asian gambling hub.

Crown, controlled by billionaire James Packer, has agreed to sell half its stake in Melco Crown Entertainment for $1.6 billion to its Hong Kong-based partner, Melco International Development, which is headed by Lawrence Ho.

Crown will be left with a 14 per cent stake in Melco Crown, with the Australian company exploring options to "monetise" part of that shareholding but stating there was no offer of any sale of shares.

Mr Packer will also resign as deputy chair and non-executive director of Melco Crown Entertainment.

Crown, which is still dealing with the arrests of 18 of its employees held in China since October, also revealed it will not proceed "at this time" with its Alon casino development project in Las Vegas.

It also abandoned a plan - announced in June - to separate its international assets from its Australian casinos.

"The board's decision represents a prudent alternative to the proposed demerger," Crown chief executive Rowen Craigie said on Thursday.

CMC Markets chief market strategist Michael McCarthy said Crown appears to be selling out of Macau entirely.

"This seems to be an admission of defeat, and they are walking away," Mr McCarthy said.

"There is little doubt this is a negative for the stock."

Macau once led the way in Crown's plans for Asian expansion. But in recent years, the amount of gambling revenue generated in the former Portuguese colony has fallen because of slow economic growth in China and the Chinese government's anti-corruption campaign.

Crown shares went into a trading halt ahead of Thursday's announcement, which also included a first-half trading update showing a 45 per cent drop in turnover from high-roller gambling at its Australian casinos over the 23-week period, compared to a year earlier.

But VIP gambling activity in the first three months of the prior corresponding period had been extremely strong, the company said.

Revenue from the main gaming floors in its casinos in Melbourne and Perth was flat, reflecting modest revenue growth in Melbourne and softness in Perth.

Total revenue from the Australian casinos and hotels was down by about 12 per cent.

Crown said it was continuing to prepare for a proposed share market float of a 49 per cent stake in some of its Australian hotels and associated retail property.

"These business decisions are strategic and for the long-term and will underpin the company's future over the next decade," Crown Resorts chairman Robert Rankin said.

Crown said proceeds from the Melco share sale will be used to reduce debt, fund a special distribution and enable a share buyback.

Crown shares last traded at $11.37.

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