Casinos operator Crown Resorts has reduced its exposure to the weakening Macau gambling market, cutting its stake in its Macau joint-venture, Melco Crown Entertainment (MCE).
Investors have welcomed the move, with analysts saying proceeds generated from the sale of part of Crown's MCE holding will ease its debt and help it fund big projects in Sydney, Melbourne and Perth.
Billionaire James Packer, Crown's majority shareholder, is also stepping down as MCE co-chairman, but will become MCE's deputy chairman.
Crown's MCE board representation will be cut from three to two.
Shares in Crown were up 54 cents, or 4.57 per cent, at $12.36 at 1254 AEST.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Crown will reduce its MCE stake from 34.3 per cent to 27.4 per cent, generating proceeds of about $US800 million ($A1.07 billion), but says it intends to maintain a significant investment in MCE.
It will initially use the proceeds to reduce debt, which stood at $2.95 billion at December 31, 2015.
Under the agreement MCE will repurchase 155 million Crown's MCE shares at about $US5.17 per share.
Following the sell-down, Crown will consider whether it can pay a distribution to shareholders while maintaining a strong balance sheet and credit profile to fund existing Australian development projects.
Deutsche Bank analyst Mark Wilson said the price was a six per cent premium to the bank's valuation and was positive for Crown.
"It will alleviate some balance sheet concerns, and it will better position the company to fund the capex (capital expenditure) projects, including Crown Sydney," Mr Wilson said in a research note on Thursday.
He said the cut in Crown's stake was also positive given the Macau market's challenging conditions.
Revenue from MCE's casino resorts in Macau - City of Dreams and Studio City - has tumbled sharply due to weak markets conditions.
In the half year to December 31, 2015, overall gross gaming revenue across the entire Macau market was down 31 per cent.
Aside from the casino resorts in Macau, MCE operates the City of Dreams Manila in the Philippines.
Crown, which operates casinos in Melbourne and Perth, is building a $2 billion luxury VIP-only casino and hotel at Barangaroo in Sydney.
The company is also spending $645 million on upgrading its Perth casino resort, plans to build a casino resort in Las Vegas, and intends building a new luxury hotel in Melbourne.
Crown's share of MCE's reported net profit for the half year to December 31 was $9.4 million, down 89 per cent on the prior corresponding period.
The company in February said that the medium- to long-term outlook for Macau was positive but Macau continued to experience a challenging period that had affected all casino operators.
