Incoming Crown CEO lays down plan for the future

by William Brown Last Updated
Incoming Crown CEO lays down plan for the future

The incoming chief executive officer of troubled casino operator Crown Resorts said the wounded casino giant can play its part in Australia’s COVID-19 recovery.

The Australian Financial Review reports that Steve McCann, who is chief executive of Crown and Crown Melbourne, pending regulatory approvals, spent the past week meeting investors after Crown recently delivered a full-year loss.

Mr McCann said Crown could help revitalise Sydney and Melbourne and has given his strongest indication yet that he does not favour hiving off Crown’s flagship casino in Melbourne to another group.

He said shareholders remain supportive of the group and had welcomed the agreement Crown has reached with its lenders, which allowed it to extend the tenor of its debt and gain flexibility on debt covenants should any of its casino licences be suspended or cancelled, as is being considered by the Victorian royal commission into Crown.

“Obviously they’re feeling the pain a bit as shareholders, but we’re very clear, our focus is to listen to everything we’re hearing and to continue to listen and to continue to drive the reform process,” he said.

“I think what we’ve now done is we’ve provided ourselves the flexibility to navigate through a range of scenarios. We can’t obviously speculate on what they might all be, but we are going to turn our minds to every single one of them.

“We can make sure that we’ve considered dealing with all the worst-case scenarios and make sure we’re in a healthy position to retain our investment-grade credit rating and be in a position to address what we need to address and rebuild the business and get back to the top of the tree.”

Victorian royal commission set to deliver Crown findings on October 15

Crown will learn more about its fate next month, with Victorian Commissioner Ray Finkelstein expected to hand down his final report by October 15.

Mr Finkelstein has indicated he is examining scenarios in which Crown could be stripped of its licence, asking Crown to provide submissions on how the Melbourne casino could be subleased.

But counsel assisting the commission did suggest models whereby Crown could be given time to become suitable to hold the Melbourne licence, including under strict monitoring that the company would have to pay for.

A separate royal commission in Western Australia is not expected to report until March 2021.

Crown’s share price has fallen from $13.32 in May to $9.40 in recent days.

While Mr McCann said he wanted Crown to plan for possible “disaster scenarios”, these were largely out of his control and his focus was on winning back the trust of the community.

“We have to do that under all scenarios, and for these to be an opportunity to create value for shareholders. That’s priority number one,” he said.

“Really, as a market leader, I think our aspiration isn’t to meet the requirements, our aspiration is to set the world’s best standards. I think that if we can be known for the quality of the resorts that we operate and the experience people have internationally then there’s a huge upside.”

McCann committed to Crown’s future

Mr McCann again emphasised that Crown, which was previously the subject of a takeover offer from shareholder Blackstone and merger proposal from The Star Entertainment Group, would consider all strategic options for the business as it works through its regulatory mess.

Analysts have speculated these could include a split of Crown’s operating and property businesses, a model whereby Crown hived off its Melbourne casino, potentially in response to recommendations from the royal commission.

But Mr McCann’s view is that despite all its reputational damage, the Crown brand remained strong and could play an important role in helping revitalise the cities of Melbourne and Sydney and the national tourism market.

“In all our cities, Melbourne and Sydney more so, given the current environment, we need to get our mojo back. We want people to get excited, we want the city to be vibrant. We think Crown’s got a big, big role to play in that,” he said.

“We are keeping our heads down now, focusing on solving the problems we need to solve and proving to everyone that we are absolutely committed to the remediation.

‘But the brand itself is a great brand with a great history in terms of the quality of its assets, and I think it’s about bringing people back to their past, with the knowledge that we’ll be doing things in a very responsible way going forward.”

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