And Star Lay Off Workers To Raise Debt During Pandemic - April 2020
two largest casino companies, Crown Resorts and Star Entertainment, have provided
information of their survival plans in an attempt to convince investors that they
can survive coronavirus shutdowns on their businesses.
said they laid off some 20,000 workers on Thursday, either temporarily or permanently,
and lined up around $760 million in bank loans to survive the coronavirus crisis
that has ravaged the industry.
government confirmed casinos will have to close on March 23, resulting in two
of the nations biggest employers laying off thousands of workers and shutting
Star said on Thursday, to improve its liquidity position, it had negotiated an
additional debt-funding facility with existing partnership banks for AUD 200 million,
according to The Guardian. It said about 8,500 employees have stood down, and
casuals and contractors have been fired. It will be accessing the work-keeper
system of government for qualified workers, it said. The chief executive, Matt
Bekier, took a 40 percent drop in salary and the directors cut their salaries
by 50 percent.
revealed Thursday that it has now stood down 95% or more than 11,500 of its employees
saying Only employees in business-critical functions remain actively working.
full-time and part-time workers received ex-gratia compensation of two weeks
salary, while casuals received a lump sum payment of AUD 1,000. In addition, workers
were permitted to draw on existing annual and long-service leave. Crowns
chief executive, Ken Barton, and the board took to their remuneration 20 percent
said it had lined up facilities for a total of AUD 560 million with its banks
and negotiated terms with the three banks financing the construction of its Barangaroo
project in order to allow the construction to proceed. This facility [for
$450m] remains subject to final credit approvals and long-form documentation,
said its current cash balance of approximately AUD 500 million, together
with its ability to secure over $1 billion ($634.38 million) in additional debt
facilities, represented Crowns strong financial position
during the disruption period. It has not provided estimates of how long its cash
the new facility included, The Star said it had AUD 700 million in cash and undrawn
debt facilities available. That, it said, would give enough liquidity for an extended
shutdown period. Unlike Crown, The Star received estimates of the pace it would
burn through cash, saying it would need a total of around AUD 220 million under
a three-month shutdown to June 30 and a total of AUD 320 million under a six-month
shutdown to September 30.
estimates include operating expenses, employee drawdowns on accrued annual and
long-service leave entitlements, receivables offset payables, interest payments,
and payments on capital expenditure, Star said.
expansion plans for Star had been at a much earlier stage. However, Crown is at
midway through the building of its AUD 2.2 billion high-roller casino and apartment
block at Barangaroo, built to cater to Chinas VIP gamblers. Many of the
luxury units were sold even to offshore investors.
intends to continue construction of the Crown Sydney project as planned and, absent
any further delays arising from the impact of Covid-19, remains on track for completion
of the Crown Sydney hotel resort by the end of the year, Crown said in the
statement to the ASX
further blow to the Australian economy will be the slowing down or stopping of
large building projects. Currently, there are over 1,300 people employed
on the construction of Crown Sydney, which is expected to be maintained until
completion, the company said. In the lead-up to the full opening of
Crown Sydney, Crown expects to recruit over 2,000 people to work in the hotel