James Packer dumps Philippines casino bid – but will it turn around his big losses?

James Packer’s Crown Casino has scrapped plans to be part of a $US1.5 billion casino in the Philippines, saying the credit crisis has made it hard for gaming companies to fund big projects.

James Packer’s Crown Casino has scrapped plans to be part of a $US1.5 billion casino in the Philippines, saying the credit crisis has made it hard for gaming companies to fund big projects.

Crown has been working with another company, called Bloomsbury Investments, on a plan to build a casino and entertainment complex at Manila Bay.

But Crown chief Rowan Craigie says the company will not be putting any chips on the table.

“The recent and ongoing events in world credit markets have made it very difficult for gaming operators to develop commercially viable casino-entertainment projects where those projects require significant external debt funding.”

This is the second big project Crown has pulled out of in the last few months. In June it dumped plans to build a $US5.5 billion casino in Las Vegas, writing off $US44 millon in the process.

But investors and analysts are unlikely to be too worried by these decisions. The market has been growing increasingly concerned with Crown’s debt profile and the fact that many of the company’s long-term projects – such as its heavy investment in two casinos in Macau – will take years to pay off.

Yesterday’s announcement helped Crown shares jump 4.2% to $8.23, which should bring a bit of a smile to Packer’s lips.

He has taken an absolute hammering on his Crown shares since the company was split from Publishing & Broadcasting’s media business in December 2007, when Crown’s shares were worth around $15. The 45% slump in Crown’s stock has wiped $1.7 billion off Packer’s stake, which has dropped in value from $3.9 billion to $2.2 billion.

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