SYDNEY Reuters - Crown Resorts' auditor warned that on Thursday massive money laundering investigations into the Australian casino operator and the impact of COVID -19 pandemic cast material uncertainty over the company's ability to continue as a going concern?
Crown has been buried in scandal since allegations of money laundering at its Melbourne casino emerged in 2019 after legal battles and scandal. In June, financial crime regulator extended a probe into its flagship casino in Perth to also include its operations in Melbourne.
The company in which billionaire James Packer has a 37% stake, also said that the Australian Transaction Reports and Analysis Centre AUSTRAC was very likely to launch civil proceedings against its casinos in both cities.
If it does so, it is likely that Crown Melbourne and Crown Perth will be required to pay significant civil penalties, it said in its 153-page annual report released on Thursday.
KPMG, Crown's auditor, also said the cancellation or suspension of any casino licenses could trigger an event of default on some of its debts.
If that occurred, the report said Crown had some waivers with its financiers which would provide a period of time to negotiate with lenders or otherwise refinance the facilities. Its bonds are also at risk of having to be repaid if its credit rating falls below investment grade, KPMG added.
The conditions disclosed indicate a material uncertainty exists that may cast substantial doubt on the Group's ability to continue as a going concern, the auditor said in the report.
To address a potential liquidity shortfall, the company had received a waiver from its banks until the end of the year and extended the maturity of its banking facilities until October 2023.
Crown shares, which have plunged 26% since its 2019 highs, were 1.5% lower for close Thursday at 9.76, slightly overperforming a wider market that fell 1.9%.