Crown Resorts Ltd has said that it will not proceed with the 1,100 room hotel casino Alon project on the Las Vegas strip and is considering an outright sale of the project.
The announcement came after the company said it was reducing its stake in the Melco Crown Entertainment joint venture to focus more on properties in Australia.
“Today’s announcements will maximize value for the benefit of all Crown Resorts shareholders, allowing us to redeploy capital to fund high quality growth projects as well as adopting a number of capital management initiatives,” Crown Resorts’ chairman Robert Rankin said in a statement.
The project has been described as “shovel ready” after two years of planning and pre-construction work at the northern end of the strip. The project was a partnership between billionaire Australian James Packer and former Wynn Las Vegas president Andrew Pascal.
Pascal acknowledged that it had been difficult to raise sufficient funds over the last year for the ambitious project but that he and the other directors remained committed to it. Crown had been the primary source of funds.
Plans submitted to developers in 2015 show a resort with two hotel towers, a 126,000-square-foot water feature, a nightclub, a movie theater and a botanical chapel. The project is located on 35 acres across from the Wynn and Encore casinos on the prime real estate once occupied by the New Frontier, where Elvis Presley first performed in Las Vegas in 1956. A $5 billion hotel project meant to mimic the Plaza Hotel in New York was meant to be built on the site after it was cleared in 2007 but never materialized.
Packer has said that he will redeploy the company’s assets to lower-risk projects in Australia. The sell-down of Crown’s stake in MCE will put its balance sheet in a better position to fund the one project which remains Packer’s dream — Crown Sydney.
The Melco Crown share sale will generate $1.6 billion, which the company will use to pay down debt of $800 million, fund a special dividend to shareholders of $500 million and a share buyback of $300 million.