Casino tycoon James Packer has an extra $100 million in his wallet after calling in a loan to his Crown Resorts empire.
Mr Packer last week sold a million subordinated notes – a debt security – to Crown for $101.58 each, returning more than $101 million to his coffers. Crown and Mr Packer’s personal wealth vehicle Consolidated Press Holdings told the n Stock Exchange after the market closed on Friday.
Crown has issued the notes since 2012 with a face value of $100, suggesting Mr Packer made 1.5 per cent interest – or $1.5 million – on the loan.
Crown on Friday also delivered Mr Packer, a company director and its largest shareholder with 48 per cent of shares, a separate $489 million cash injection in the form of a 30?? dividend and a special 80?? payment from Crown’s sale of its Macau casinos stake.
Mr Packer had another $488 million pay day in August last year when he sold 4.8 per cent of the company, bringing his ownership to below 50 per cent.
Crown is trying to reduce its debt, which at December 31 last year stood at $1.76 billion, after launching a massive overhaul of its business that has seen it abandon global ambitions for a smaller operation focused on its casinos in Melbourne and Perth and its under-construction resort in Sydney’s Barangaroo.
The company has another $422 million in subordinated notes outstanding and intends to buy back as many as possible. Crown also plans to launch a $500 million buyback of ordinary shares as early as Monday, which if that target is reached, will represent a repurchase of almost 6 per cent of issued capital.
A spokesman for Mr Packer could not say on the weekend if he owned more of the debt notes or if he intended to cash them in.
Crown’s overhaul followed the arrest of 18 Crown staff members in China in October, of whom 14 remain behind bars accused of “gambling crimes”. Two months later Crown said it would sell its stake in its Macau casino joint venture Melco Crown and was canning plans to build a new casino in Las Vegas.
Crown’s half-year result released in February revealed that VIP gambling income, largely driven by Chinese visitors, was down more than 47 per cent in Melbourne and almost 39 per cent in Perth. That led to a 9.6 per cent profit slump for the half.
The company is also looking for savings in its marketing and sponsorship budget and has started cutting its workforce, starting at its Perth casino last month.