It’s funding D-Day in falling Star Entertainment’s desperate bid to stay afloat

[Pelican Press 0]

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It’s funding D-Day in falling Star Entertainment’s desperate bid to stay afloat

Embattled Star Entertainment has shocked investors with a pause in trade ahead of the release of its half-year financial report, with a repeated warning that without a white knight it may not be able to continue as a going concern.

The casino operator — which runs casinos in Sydney, Brisbane and the Gold Coast — has for months been desperately searching for a funding lifeline to stay afloat as it battles a liquidity crisis.

Star was due to release its six months accounts to the end of December this morning but instead entered a trading halt just before the *********** Securities Exchange opened.

Just 30 minutes after pausing trade in its shares — which have lost 75 per cent of their value over the past year — Star released a statement saying it was continuing to explore possible solutions “that might materially increase the group’s liquidity position”.

It expects to receive “one or more liquidity proposals during the course of today”.

“It is likely that the 1HFY25 report will only be able to be finalised if the company has received liquidity proposals which, after appropriate consideration by the directors, are sufficiently capable of being progressed to finalisation in the context of determining whether the company can continue as a going concern,” it said.

“As noted in the company’s recent ASX announcements, there remains material uncertainty as to the group’s ability to continue as a going concern.”

Star was last week offered a five-year financial lifeline worth $650 million from Oaktree Capital Management after a series of bruising battles with regulators over scandals at its venues over the past few years left it on the brink. The NSW Independent Casino Commission is also keeping a close eye on its operations.

The proposal would require approval from the NSW and Queensland governments, and would still leave the company short of funds before the deal kicked in.

The casino operator has recently been in talks with Hong Kong-based firms offering to buy its 50 per cent share in Brisbane’s Queen’s Wharf entertainment precinct, which opened in August. It has already sold off assets at its Sydney flagship complex to raise money.

It ended the year with just $78m in cash available, losing more than $8m in the final quarter of 2024.

The Star has been struggling since the fallout from a high-profile money-laundering scandal in 2021 that steered lucrative high rollers away from its casinos.

Former executives and board members have also been accused of putting profit above risk and failing to take action to prevent money laundering in a case brought by the *********** Securities and Investments Commission that began Federal Court hearings earlier in February.

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