Star Entertainment says talks with government, lenders continue

Jenny Ortiz September 12, 2024

SiGMA news

Star Entertainment says talks with government, lenders continue

Star Entertainment Group Ltd remains in a precarious financial situation as it continues negotiations with various stakeholders, including state governments, regulators, and lenders. On Wednesday, the company announced that it is still unable to release its financial results for the fiscal year 2024, with trading of its shares on the Australian Securities Exchange (ASX) remaining suspended.

The company’s latest filing indicated that it is “continuing to work with various stakeholders and advisers in respect of its financial position.” This includes discussions on the application of provisions in the Corporations Act 2001, particularly the safe harbour provisions, which offer directors protection from personal liability while pursuing a restructuring plan.

Star Entertainment’s financial difficulties have been exacerbated by a second finding of unsuitability in New South Wales (NSW), where The Star Sydney is located. The company has sought tax relief from both NSW and Queensland governments, but the NSW government has reportedly denied further assistance. In contrast, Queensland is considering possible support, particularly in light of the recent grand opening of the AU$3.6 billion Queen’s Wharf Brisbane development, which is a significant tourism asset.

Financial strains and regulatory challenges

The company’s struggles are rooted in a combination of factors: increased compliance costs due to past anti-money laundering and responsible gambling failures, a weakened domestic gaming market amid economic challenges, and a decline in international high roller activity. These issues have strained Star Entertainment’s liquidity, prompting the current crisis talks.

Despite these financial hurdles, Star Entertainment has not entirely slowed its operations. The company recently completed the opening of Queen’s Wharf Brisbane and sold its Treasury Brisbane Casino for $45.5 million. It has also appointed former Crown Resorts COO Mark Mackay as CEO for The Star Gold Coast.

Additionally, Star Entertainment secured a notable legal victory when a Singaporean gambler was ordered to repay over $25.3 million in debts to The Star Gold Coast casino.

Future and restructuring efforts

The outcome of Star Entertainment’s ongoing negotiations and restructuring efforts will be critical in determining its future. The company is expected to resume trading on the ASX once it releases its delayed financial results. Until then, the company’s ability to navigate this financial crisis and implement a successful restructuring plan remains uncertain.

Subscribe here to SiGMA’s Top 10 News countdown and SiGMA’s Weekly Newsletter to stay up to date with all the latest iGaming News, and benefit from Subscriber-Only Offers.