Shares in Star Entertainment suspended from trade as casino operator remains on brink of collapse

The Australian Financial Review can reveal Bally’s Corporation, which has 19 casinos across 11 American states, sent representatives to Australia to meet Star and visit its casinos last week, and has also met key Star shareholders and lenders. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services. The Motley Fool launched its Australian presence in 2011, and since then has grown to reach over 1 million Australians. A trading update from executive chair Jack Cowin has raised investors’ confidence. The parent company’s guarantee of Star Entertainment’s 50% share of the DBC debt facility remains in place.
In the absence of one or more of those arrangements, there remains material uncertainty as to the Group’s ability to continue as a going concern,” Star said. Star Entertainment will sell its stake in the new Queen’s Wharf casino and entertainment complex in Brisbane, a deal that will give the company enough cash to stave off collapse for several months. Strict new gambling rules and fewer tourists at the Withdrawal fee crypto casino operator’s flagship Sydney establishment have pushed the company into a loss for the past three months. The largest shareholder of the pubs and bottle shop giant said it wants more say in the company’s strategy ahead of new CEO Jayne Hrdlicka’s arrival. The Star Entertainment Group Limited is currently rated five stars by our Analyst Rating and trades at 0.4 of its price to fair value on a $0.27 share price (as at 1st October 2024). On the other hand, Star continues to face potential operational risk at its Queensland facilities. This stems from material uncertainty around the considerable Australian Transaction Reports and Analysis Centre (“AUSTRAC”) fine after alleged non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
While Star has pointed to an unnamed party as key to its survival, it has not provided any details as it continues to negotiate a deal. The Australian Financial Review can reveal that this prospective financier is Salter Brothers, led by wealthy businessmen Paul and Robert Salter and backed by offshore funds. “I would note that the regulatory environment and challenges [of] technology upgrades and Jackpot City playtech slots other matters we’re dealing with in Australia are quite unique to the Australian market. The NSW and Queensland governments have shown little interest in bailing out the company, and on Friday they pointed to the impact of Star’s precarious situation on jobs.
The collapse of the deal means Star Entertainment will retain its 50% equity interest in Destination Brisbane Consortium (DBC). Star must also reimburse the JV partners an estimated $31 million in equity contributions by 5 September. This means Star Entertainment will have to pay back the $10 million it received from the JV partners by next Wednesday. Star Entertainment has announced that the deal to sell its 50% stake in Queen’s Wharf, plus other assets in Brisbane, is now off. The deal falling over would leave Star saddled with those costs, as it attempts to turn its business around with the backing of Bally’s. The termination notice will come into effect next Monday unless it is withdrawn within five business day. The Hong Kong investors poised to buy Star out of Brisbane’s Queen’s Wharf development have threatened to walk away from the deal that was first inked back in March.
I’m not sure why the Grattan Institute cares whether people are dying with large super balances? I mean, wasn’t everyone pointing the finger at retirees for spending more than other generations (unfairly in my view – and no, Treasure Island gaming floor 2027 I’m still working). US financial giant Oaktree also offered to refinance Star’s debt if it could reach agreement with Star lenders owed more than $450 million, and provide up to $650 million of fresh funding. The deal was subject to numerous conditions and there was top free slots UK no deposit guarantee it would progress, free slot demo 2026 Star said. This includes its major shareholder, pokies billionaire Bruce Mathieson, offering to buy its Gold Coast casino.
Star’s lawyers told the Federal Court last month that a fine of more than $100 million could trigger the group’s financial collapse. “The Star is continuing to engage with the joint venture partners and will provide an update if there are any material developments regarding the parties’ respective interests,” it said. Star offered a glimmer of hope when it indicated that negotiations were continuing even though its joint venture partners had declined to extend the deal deadline to next week. The deal will give the company breathing room to find the funding needed to survive a massive cash crunch after Star lost the support of both its investors and lenders. The Far East Consortium said on Friday that it and Chow Tai Fook Enterprises will now take full control of the facility after paying $53 million for Star’s 50 per cent share. Star will also receive $5 million a month to run the casino, flamingo las vegas jackpot winners rising to $6 million a month as of next year. The group has been on the brink of collapse for months but staved off administrators by offloading its 50 per cent stake in a new Brisbane precinct and a $250 million short-term bridging loan.
The published report states that it made a loss before interest, tax, depreciation and amortisation costs of $27 million for the quarter to June 30, on revenue of $270 million. Star said Destination Brisbane Consortium (DBC), in which it continues to hold a 50 per cent equity stake, has a debt exposure of $1.4 billion. It now also remains exposed to $200 million of future equity contributions to DBC due to massive cost overruns at the $3.6 billion resort.