Crown stuffs $630m under the bed, betting on rainy days ahead
Elizabeth Knight, 24 May 2021
At first glance there doesn’t appear to be an obvious nexus between alleged fresh money laundering claims against Crown Resorts revealed during Monday’s Victorian royal commission and the company’s decision not to redeem $630 million of subordinated notes.
For that matter, most wouldn’t join the dots between Crown’s decision to not pay out its noteholders and claims by the Victorian gaming regulator last week that it was misled by Crown about the arrests of 19 of its China staff back in 2016.
Crown paints a portrait of itself as a now conservative company that wants to maintain its liquidity in the face of the COVID-induced sporadic closures of its venues or changes to their operating conditions.
But the reality is that Crown’s financial position is sufficiently unclear that it needs to keep its financial powder dry for a number of contingencies that arise from the two royal commissions of which it is the subject.
It just isn’t an opportune time to be handing its noteholders $630 million they were expecting under a July 2021 timetable. Crown is looking to revisit the prospect of allowing redemption in a year when its future is less clouded.
It is undoubtedly true that there remain COVID risks for Crown particularly as they relate to social distancing or spot venue closures. But there are additional risks produced each time more damaging evidence is uncovered at the West Australian and Victorian royal commission hearings that are delving into its murky past.
