After a two year downturn in the world’s biggest casino hub. James Packer’s Crown Resorts Ltd has sold its $800 million stake in Melco Crown Entertainment.
Crown is selling its shares back to Melco, reducing its stake in the company from 34 per cent to 27 per cent.
According to a statement from the Hong Kong based company, Packer will resign as co-chairman of Melco. Instead, he will take on the role of deputy chairman.
Gambling revenue in Macau fell for a 23rd straight month in April.
Macau, the only place in the world where the Chinese can legally gamble, has been hurt by China’s slowing economy and the government’s crackdown on graft.
The sell-down comes despite Packer last year saying last year that Crown had “great faith” in Macau.
At the same time, Packer has reportedly been talking to private equity about privatising Crown.
“I’d say there’s definitely something lurking in the background,” Sam Fimis, a wealth adviser at Patersons Securities told Bloomberg.
He said the cash from selling the stock sale would give Packer more options.
In its statement to the market, Crown said the proceeds from the share sale would initially be used to cut debt.
“Following completion, Crown will assess its capacity to make a distribution to shareholders, and at the same time maintain a strong balance sheet and credit profile to fund existing Australian development projects, including Crown Sydney,’’ the company said.