ASX suspends Star over accounts failure with administration on the cards

Star Entertainment was suspended from trading by the ASX this morning over its failure to lodge financial statements for the December half-year and may not trade again if its lenders fail to agree to a deal that gives the casino operator fresh funding.

Star’s board has not been able to sign off on the accounts as the group has not been able to secure financing to ensure it won’t run out of cash as early as this week.

Brisbane’s newly opened Queen’s Wharf is home to Star’s casino and hotel.Credit: Matt Dennien

Star acknowledged via the ASX that its shares had been automatically suspended but did not update the market on the status of financing offers it expected to receive on Friday.

“The Company is unlikely to be in a position to lodge its (December half year) report unless, and until, it has secured a refinancing commitment that would enable The Star to refinance all of the Group’s existing corporate debt, as well as to provide additional liquidity,” Star said in a statement from its board.

The success of any deal is dependent on its lenders, who need to agree to any asset sale or refinance of their debt which is paying interest of more than 13 per cent.

Star’s management is working to convince a syndicate of lenders – Macquarie, Westpac, Deutsche Bank, Washington H Soul Pattinson and Barclays – to either accept a sale of its assets, valued at about $800 million, or refinance their collective debt of $430 million.

More than 8000 jobs are on the line, with the company running out of time and money to keep its casinos open.

Star’s shares closed more than 15 per cent weaker on Friday at 11¢, valuing the company at $315 million. It was once valued at $5 billion.

The casino operator, which was due to deliver its latest accounts on Friday, is facing voluntary administration. Star’s board said it was considering last-minute “proposals” to stay afloat.

The Star casino in Sydney.Credit: Bloomberg

Star said on Friday that any proposal would need to be large enough to keep Star afloat and carry a realistic chance of materialising before its board could approve the first-half results.

In February, Star said it had received an $650 million offer from US alternative asset manager Oaktree Capital to refinance its debt. However, the proposal was laced with conditions, including the approval of NSW and Queensland governments and regulators, and a satisfactory settlement with existing lenders.

Star also told investors it had received overtures from its Chinese partners – Chow Tai Fook Enterprises Limited and Far East Consortium International Limited – to pick up a 50 per cent stake in the company’s Queen’s Wharf casino in Brisbane.

Meanwhile, Star’s largest shareholder and legendary hotelier Bruce Mathieson had also previously pitched two offers for the company’s Gold Coast casino.

Star has been embroiled in crisis since reports by this masthead sparked regulatory probe into the company’s flagship Sydney casino in 2022 found it had lax anti-money laundering controls, allowed patrons to flout China’s capital rules and encouraged problem gamblers to bet.

A second inquiry last year uncovered several additional license breaches, including falsifying records. The casino has been overseen by a government-appointed manager since the 2022 report.

Apart from the higher regulatory costs following a run of scandals, Star’s fortunes have also been hurt by poor gaming turnover at its casinos and the move to cashless gaming in NSW, with Queensland to follow.

Most Star employees are based in Sydney, and despite recent troubles, its Pyrmont site remains a major tourism destination, with 650 hotel rooms and 36 food and beverage venues. Any closure would severely affect neighbouring businesses.

NSW and Queensland governments said on Friday their main concern was to ensure jobs were protected.

“Star has to maintain itself as a viable casino ... we’re obviously been working with them over a period of time on a range of issues including the importance of the employment that is there and will continue to do so,” NSW government senior minister Penny Sharpe said.

Queensland Premier David Crisafulli said he wasn’t commenting on the financial viability of Star.

“My non-negotiable is that place has got to stay open,” he said. “If whoever runs it in the future wants to talk to us about what future opportunities look like it ... it is about the workers.”

With AAP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.