Australia likely to cancel Christmas Island casino lease

Australia likely to cancel Christmas Island casino lease

CANBERRA (Dow Jones): The Australian government said yesterday
it expects to begin a process of canceling Christmas Island
Resort Pty. Ltd.'s lease on an A$80 million casino resort on the
island, and resuming ownership of the property.

The government Tuesday canceled the company's license to
operate a casino on the island, which is located off the southern
coast of the Indonesian island of Java, after it failed to meet
debts of around A$3 million.

Christmas Island Resort is 90 percent-owned by Indonesian
businessman Robbie Sumampow, with the remaining stake held by
Western Australia state property developer Frank Woodmore.

A spokesman for Australia's Territories Minister Alex Somlyay
said revocation of the company's lease over the resort likely
will begin soon.

The resort is sited in government-held land that is leased to
Christmas Island Resort, he said.

Somlyay's spokesman told Dow Jones Newswires the government
hasn't been approached by anyone interested in taking out an
operating license over the casino.

Australian businessman Kerry Packer, who controls Publishing &
Broadcasting Ltd. has in the past shown an interest in operating
the casino.

Anyone interested in applying for a license would go through
the normal probity checks, the spokesman said.

The casino closed in April, plunging the island into economic
collapse with 300 casino workers collectively owed more than $2
million in unpaid wages and redundancies.

The Age newspaper earlier this month reported inquiries into
Indonesian businessmen with links to deposed President Soeharto
had stopped Sumampow sending millions of dollars out of Jakarta
to pay the debts.

Effects of the casino closure on Christmas Island's economy
had been "quite considerable," the spokesman said.

The company also owes money to the Christmas Island Power
Authority, National Jet Systems Group, and Christmas Island
Travel Pty. Ltd..