Australian billionaire James Packer says an ambitious program to expand his company Crown's hotel and casino resorts in Asia and Australia is affordable.
The Crown chairman told shareholders at the company's annual general meeting on today that Crown was at a very important stage of its development as it seeks to tap into the "incredible power" of the rising Chinese and other Asian middle classes, including India.
Packer said the expansion of Crown's joint venture interests in Asia would be "self-funding", and the company would increase its debt to expand in Australia and continue upgrading existing operations here.
"Asia is self-funding, and we're going to build Sydney (a proposed $1.5 billion resort and VIP-only casino at Barangaroo) and Perth (a new six-star hotel) out of increasing our debt a little bit but retaining some earnings," Mr Packer said.
Packer said about half of Crown's value as a company was now in its joint-venture hotel-casino operations with Melco International in Macau.
He said the Melco Crown Entertainment joint venture funded all of its own projects and was now almost debt free at a parent company level.
Independent financing was in place for MCE's Studio City hotel-casino development in Macau and MCE's hotel-casino project at Manila in the Philippines.
"So what we'll be looking to fund from Australia is Sydney and Crown Towers Perth," Packer said.
Packer added that a proposal to develop a joint-venture US$400 million casino-resort in Sri Lanka would not require "an earth-moving cheque".
He said the Macau business would look to start paying dividends next year, which would provide additional cash.
Crown holds a stake of 33.7 per cent in MCE.
Packer said the cost of Crown's investment in MCE was US$600 million but that stake was now worth about US$6.2 billion.
Crown currently operates casinos in Melbourne and Perth and has been upgrading them to make them more competitive with new casino-resorts in Asia and attract more high-rolling gamblers from China.
Crown is also negotiating the development of a six-star casino-resort in Sydney and has expressed interest in developing a casino-resort in Brisbane.
MCE in Macau operates the City of Dreams casino-resort and is developing the Studio City casino-resort.
MCE also has an interest in a consortium to develop and operate the City of Dreams casino-resort in Manila.
This month, Crown confirmed that it was in talks with the Sri Lankan government to develop a US$400 million casino-resort in the Sri Lankan capital, Colombo.