Crown Resorts has revealed that it could fail on paying its debt in case negative findings are made by Victoria’s Royal Commission. The Australian gambling giant said that a revocation of its operating licence for Crown Melbourne would have severe consequences not only for the company’s investors but for thousands of people who work there, too.
On July 8th, the company’s executive chair Helen Coonan denied the rumours that Crown Resorts was trying to interfere with the Royal Commission’s investigation at the time it wrote to the state’s gaming minister Melissa Horne to inform her that it was not in the public interest for the gambling operator to fail.
An edited version of the letter sent by the gambling company to Ms Horne was published earlier today. According to it, the jobs of 12,000 people who work at Crown Resorts’ Southbank complex could be at risk in case the Victoria’s Royal Commission makes some negative findings against the operator.
Currently, Commissioner Ray Finkelstein is investigating the gambling giant to consider whether it is suitable to keep its operating licence for Crown Melbourne. The probe was initiated after the New South Wales (NSW) Commissioner found the gambling operator unfit to run its new Barangaroo casino in Sydney.
Crown Resorts Could Lose Its Melbourne Casino Licence
The references to a particular outcome from the Royal Commission’s inquiry seem to be associated with the possibility for Crown Resorts to lose its operating licence in the state. The letter says that Crown Resorts would be at risk of failing to pay its lending covenants in case a negative ruling is announced. It has made reference to the conditions associated with the company’s debt of approximately AU$700 million.
In its letter sent to the Victorian gaming minister, the company said that the majority of the employees at Crown Melbourne have neither directly nor indirectly contributed to the company’s failures. Furthermore, the gambling giant explained that its staff members have suffered considerable uncertainties during the coronavirus pandemic and these uncertainties would be even greater in case negative findings are made by the Royal Commission.
The final public hearings of the Victoria’s Royal Commission are being held today, with Commissioner Finkelstein set to report his findings by October 15th.
The Australian gambling giant shared that a negative ruling will impact on company’s shareholders, trade creditors, unions, employees and casino patrons, as well as on the entire tourism industry in Melbourne and the hotel precinct. According to Crown Resorts, a negative outcome for its Victorian casino licence could provide potential overseas suitors with a chance to take advantage of the situation.
Recently, the gambling company has received a number of acquisition offers. US private equity firms Blackstone and Oaktree have both expressed their interest to take over part or all of the company’s assets. The gambling operator’s Sydney rival The Star has also made a merger proposal to the struggling casino giant.
- Author
Olivia Cole
