Crown Resort announced its annual revenue loss, and they have stopped speaking with Oaktree Capital about buying the $2.3 billion stake of James Packer. The losses were already known to the company and the general public, but the failed takeover just seems to add more dark clouds over the operator’s name.
Crown Resorts is in a bad place at the moment, as they are also dealing with inquiries by the Royal Commission. So, they have a hard time rebuilding their image. On top of it, they have lost their casino license in Sidney, so these are indeed dark days for Crow Resorts.
The problems started when it was announced that Crown Resorts allowed for money laundering activities to be done within the company. Understandably, regulators were furious, as they expect strong anti-money laundering policies in place in every operator, and Crow Resorts did not manage to implement such.
The operator is also part of an investigation in Perth and Melbourne, which is an additional problem they have on top of the difficulties they have faced with the COVID-19 pandemic, just like all the other operators. Dealing with all these issues proved to be an almost impossible task for Crown Resorts.
Neither Crown Resorts, nor Oaktree published a statement on why the deal they have discussed is off, and from what is known, the bid that the investment equity offered to Crown was raised back in June to $2.38 billion, with $1.53 billion of it coming from a private loan, and the remaining $845 million would be turned into shares in Crown Resorts for the price of $9.98.
In April, the offer stood at $2.31 billion, so it is unknown what changed in Oaktree’s thinking, as it seemed that the deal was all but done after the increase of the initial bid.
So it comes as no surprise that the annual losses of Crown Resorts are massive, as they took a hit of A$261.8 million, which is massively under the A$79.5 million in profits they have announced just last year. Crown Resorts said that the casino located in Perth would be able to get back on the market and rebound after the latest COVID-19 restrictions were loosened, but the environment in which they operate is still very uncertain.
Crown Melbourne, which is considered to be the flagship Crown property, was closed for exactly 160 days in 2021 due to the COVID-19 restrictions, so understandably, the revenue from that property was down by 64%, so the loosening up of the restrictions is very good news for the operator.
Some experts note that it is vital for the Perth and Melbourne casino’s performance to increase and to show good numbers, as it will be the key factor that will determine whether Crown Resorts in Sidney and Crown Resorts in Melbourne reopen. Directors in Crown Resorts have claimed that they will do “whatever it takes” to rebuild Melbourne’s trust in the brand, so it remains to be seen how this situation will pan out. More Online Casino News