Two of Australia’s biggest casino operators have been forced to take out lines of credit to remain afloat amid the CCP virus crisis.
Crown Resorts and the Star Entertainment Group announced on April 16, that they will access debt funding to cope with the forced closures to their casinos.
The federal government closed all casinos on March 23, in an attempt to slow the spread of the CCP (Chinese Communist Party) virus, commonly known as novel coronavirus.
Despite the closures, both companies have continued operating costs that are estimated to be in the millions.
Crown’s chief executive officer Ken Barton noted in a media release, that for the company to remain afloat the ongoing costs will amount to $20-30 million (US$13-$19 million) per month.
Star Group estimated their costs will be about $10 million (US$6.3 million).
In a media release, Star Group said it had secured $200 million (US$127 million) in debt funding from pre-existing banking partnerships.
Crown has secured $1 billion (US$635 million) in debt funding to help it through the CCP virus pandemic.
Thousands Laid Off
On April 16, Crown said that it had let go of 95 percent of its staff, or 11, 500 people. While Star let go of 8, 500 employees and terminated all casuals and contractors.
Barton said, “I have a deep gratitude to our employees for their understanding and commitment during this painful and highly uncertain time.
“We are continuing to investigate ways in which we can support our employees on an ongoing basis,” he said.
To that end, Crown Resorts have agreed to provide an ex gratia payment of two weeks pay to full-time and part-time employees who have been stood down, and a lump sum payment of $1,000 (US$635) to eligible casual workers.
On April 16, Star Group’s chairman John O’Niell said, “To temporarily stand down more than 90 percent of our dedicated workforce will be the most painful decision our senior management is ever likely to encounter.”
Employees for both companies will also be able to draw down on existing annual and long-service leave entitlements and both companies have registered for the federal government’s JobKeeper Payment Program.
The Jobkeeer program allows businesses impacted by the pandemic to access a wage subsidy to continue paying their employees. Each business is able to claim a fortnightly payment of $1,500 (US$952) per eligible employee.
The executive and senior management staff of both companies will also take pay cuts, with Crown Casino staff reducing their pay packets by 20 percent for the next two months and Star Group’s chief executive officer will reduce his salary for the rest of the financial year by 40 percent.