Embattled casino operator The Star Entertainment Group is chasing hundreds of millions of dollars in extra funding from investors as it works to stave off financial collapse.
Its major investors, like pokies billionaire Bruce Mathieson, heavily backed Star with $1.55 billion worth of cash raisings just last year for a business that is now worth just $1.3 billion, based on when the stock last traded Thursday afternoon.
Star Entertainment’s new chief executive, Steve McCann, is trying to financially stabilise the casino operator while the retention of its Sydney licence is still in doubt. Credit: Dominic Lorrimer
The next 24 hours are expected to be crucial for the casino operator, which is due to release its delayed full-year results on Monday. Star Entertainment will need to demonstrate that it has the funding to stabilise an underperforming casino business while also fixing the probity issues that have left the company’s retention of its Sydney casino licence in doubt.
The company was reportedly sounding out investors for a $300 million raising last week via a convertibles notes issue before the final report of Adam Bell SC’s second inquiry into its Sydney casino on Friday found it was still unsuitable to hold a licence. The report stopped short of recommending the licence be revoked.
The public release of the report delayed the release of Star’s full-year results, which were due on Friday.
Star Entertainment’s latest results are expected to reveal massive writedowns of its newly opened Brisbane casino, Queen’s Wharf, which cost nearly double the initial $2 billion estimate, and at a time when casinos are underperforming across the country due to the cost of living crisis and anaemic tourist interest. The Queen’s Wharf precinct is a joint venture with Chow Tai Fook Enterprises and Far East Consortium.
Star Entertainment chief executive Steve McCann, who previously led Crown Resorts through to its takeover by US private equity group Blackstone, joined the company in June.
“I recognise that there are many complex issues and challenges for the company to address,” McCann said at the announcement of his appointment.
“I am committed to working with the board and the various stakeholders to help drive change, restore confidence and achieve a sustainable resolution.”