by: Gene Koprowski.
Share prices in Australia's largest
casino proprietor, Crown Ltd., surged by a record in trading after the
company raised $1.6 billion from banks to repay debt due in August
2010.
Crown's stock price rose by 10 percent to close at $5, the biggest one-day gain since the stock commenced trade a year ago, as the company demonstrated that credit continues to flow for well-run companies. As a result of today's deal, Crown won’t face another “major refinancing” until late calendar 2011, executives said.
The company's chairman James Packer created the company when he split his media and gambling assets. Packer and his team refinanced the debt as they prepare to take control of U.S. operator Cannery Casino Resorts LLC. Crown bought that firm for $1.75 billion in December 2007.
The company has net debt of $180 million, including $1.6 billion of cash being held on deposit pending settlement of the Cannery transaction.
The company is continuing talks with regulators in Nevada and Pennsylvania, American states where Cannery has gambling operations, to gain licensing approval for the purchase.
Crown has nearly $900 million of U.S. dollar-denominated debt with an average interest rate of 5.9 percent once it finishes the Cannery deal.
The Meadows Racino in Pittsburgh, which will contribute most of the earnings in the Cannery acquisition, has posted “double digit” revenue growth, the company said.
Trading at Crown casinos in Melbourne and Perth has been “solid” with revenue rising 4 percent in the five months ended November, according to analysts.
The company voiced plans to pay out all of its earnings for the year ending June 30 as dividends.
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