Melco open to offloading Crown Resorts stake

Lawrence Ho’s Melco Resorts has signalled it could make a full retreat from Australian casino group Crown Resorts by selling the 10 per cent stake it bought from James Packer last year, a deal that triggered a public inquiry into whether the transaction breached Crown’s Sydney casino licence.

The Hong Kong-based Melco agreed to buy 20 per cent in Crown from Mr Packer in May last year and said at the time it was interested in increasing its shareholding and would request seats on Crown's board.

Lawrence Ho (left) tore up his deal with James Packer to buy another $880 million of Crown shares earlier this month.

But only half of the $1.7 billion stake changed hands, with the second half of the deal dumped earlier this month.

Melco said it decided not to buy the second 10 per cent parcel of shares, worth $880 million, so it could focus on its casinos in Macau as the coronavirus outbreak devastates the territory's gambling trade.

The deal's collapse came in the midst of a NSW gaming regulator inquiry which is probing whether it breached Crown's casino licence, which bans Melco boss Laurence Ho's father, Stanley Ho, and associates from involvement in the casino it is building at Barangaroo because of alleged links to organised crime.

Melco president Evan Winkler said in a quarterly earnings call overnight on Thursday, Australian time, that the group did not see an "urgency" to offload its existing 10 per cent Crown stake, based on how it saw the recovery from the health crisis panning out.

Crown’s new Sydney casino is set to open its doors early next year. Credit:Peter Braig

"We like the Crown assets," Mr Winkler said. "All that being said, we're evaluating every single aspect of the business."

"So to the extent that there were capital needs going forward, that would obviously be a potential source of liquidity."

Mr Ho told analysts that in the foreseeable future Melco would "continue to take a look at that stake and see what happens going forward," but that its immediate focus was stabilising its Macau business.

We like the Crown assets. All that being said, we're evaluating every single aspect of the business.

Casinos in the Chinese gambling hub reopened on Thursday following a government enforced 15 day shutdown designed to prevent the spread of coronavirus.

Crown's newly installed chairwoman Helen Coonan this week said the company did not know what Melco's intentions for Crown were, beyond its recent public statements that it no longer planned to increase its stake or request seats on the board.

Ken Barton, who was elevated from Crown chief financial officer to chief executive three weeks ago, would not say if Crown management had met with Melco in the past year to discuss its plans for the company.

The NSW Independent Liquor and Gaming Authority's public inquiry will resume on Monday, and is set to examine the use of "junket" tour operators who bring wealthy Chinese gamblers to Australian casinos.

The Sydney Morning Herald, The Age and 60 Minutes last year revealed that Crown went into business with junket operators with ties to organised crime, money laundering operations and foreign influence agents.

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