Australia’s top two casino operators yesterday said that they have laid off about 20,000 staff either temporarily or permanently, and lined up about US$760 million in bank credit to survive as the effects of the COVID-19 pandemic batter the industry.
Crown Resorts Ltd, the country’s biggest, said it secured A$1.01 billion (US$634.38 million) in debt funding and that 95 percent of its employees have now been laid off either temporarily or permanently.
Separately, No. 2 Star Entertainment Group said it has added an A$200 million 12-month credit line and reiterated that it has stood down about 8,500 staff.
Photo: Reuters
Casino operators are among the businesses worst hit by Australia’s measures to contain the spread of the novel coronavirus, which include shuttering of casinos and severe restrictions on movement of people.
New Zealand’s SkyCity Entertainment Group has also temporarily laid off most of its staff in Australia.
The layoffs come as Australia’s economy looks destined for its first recession in three decades as large swaths of the economy have been shut.
However, Australian employers added jobs, likely bolstered by hiring at supermarkets and associated supply chains to assist with the spending surge ahead of the lockdown and confounding the expectations of most economists.
The jobless rate edged up to 5.2 percent from 5.1 percent in February versus economists median estimate of 5.4 percent, data from the Australian Bureau of Statistics showed. The participation rate held at 66 percent.
“Today’s data shows some small early impact from COVID-19 on the Australian labor market in March, but any impact from the major COVID-19-related actions will be evident in the April data,” bureau chief economist Bruce Hockman said.
The result came as a surprise, given that in addition to casinos, companies ranging from Australia’s two major airlines to department store chains furloughed or stood down tens of thousands of workers as demand collapsed amid forced shutdowns.
Crown said yesterday that it got A$560 million in new bilateral facilities and secured a further facility of A$450 million to fund the construction of its project in Sydney.
“As a result of today’s announcement, Crown is well placed to withstand an extended period of closure,” Crown chief executive officer Ken Barton said.
Crown also said that it would need to hire 2,000 people when the Sydney project opens.
Star said that the addition of the new 12-month facility brings its cash and debt reserves up to about A$700 million.
Crown said that senior management pay, including that of the CEO, and director fees would be cut by 20 percent.
However, Crown said that it was to pay its interim dividend today, unlike Star, which had previously said that it would defer its payout.
Crown expects underlying operating cash costs to drop to between A$20 million and A$30 million per month as non-essential services at its casinos in Melbourne and Perth are suspended.
The Australian government has pledged A$130 billion to subsidize the wages of an estimated 6 million people.
Additional reporting by Bloomberg
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