Qld ready to support Star as company considers ‘liquidity’

Queensland Premier Steven Miles says his government will do all it can to avoid the “worst scenario” at Star Entertainment as the casino operator says it’s talking to advisers on liquidity issues.

Queen’s Wharf Brisbane has emerged as a major problem for The Star.

Queensland Premier Steven Miles says his government will work to avoid mass job losses at Star Entertainment, as the casino group confirms it is talking to advisers about its financial position.

Mr Miles’s renewed offer of support came as Star late on Wednesday issued a statement saying it is reviewing its financial and liquidity position with various advisers as it tries to finalise its preliminary financial accounts for the 2024 financial year.

“(This includes) holding discussions with various stakeholders in relation to its liquidity position in light of adverse trading and other conditions,” the statement authorised by the board said.

Star confirmed that the advice being provided has extended, from time to time, to considering the application of provisions of the Corporations Act, including the safe harbour provisions.

Safe harbour provisions give boards the room to trade out of trouble or secure fresh financing if that is the best option for Star’s investors, while also protecting creditors.

“The company is working to finalise its 2024 preliminary financial report, although the timing of its release has not been finalised,” Star said.

The Star said it will provide a further update in respect of its financial and liquidity position in conjunction with the release of its preliminary financial report. Upon release of the report, the company’s shares would resume trading in accordance with ASX Listing Rules.

Mr Miles, who is facing an election next month, said that the Queensland government would do “everything in its power” to save Star after its stock was suspended from trading this week following a failure to lodge its annual financial report in time.

Opening of The Star Grand and Queen's Wharf precinct in Brisbane last week.

He said the government was in talks with the company about possible deferral of tax payments to protect almost 3000 jobs at Queen’s Wharf in Brisbane. He said he was disappointed his NSW counterpart did not appear willing to help.

“The worst case scenario would be that they have to close their doors (at Queen’s Wharf) not long after opening them,” said Mr Miles. “But we want to do everything that we can to avoid that. This is a fantastic asset for our city and it is a big job generator.”

The United Workers Union, which represents thousands of Star casino workers, said the financial insecurity and uncertainty facing workers needed to end as quickly as possible. If Star’s current management failed to come to terms, workers need to be given assurances in any administration or sale scenario that their jobs would be maintained

“All parties – the company, regulators and governments – should be doing everything they can to keep Star’s doors open,” said United Worker casinos director Andrew Jones.

“It’s not fair that hardworking Star employees could be left carrying the can for a series of regulatory and operational failures they have had nothing to do with. These are 8000 jobs (across the Star group) that should not be thrown away.

“It’s hard to overstate the exhaustion and fear these workers have endured in the last couple of years, let alone the last couple of days.”

Mr Jones acknowledged that both NSW and Queensland Governments had been listening to Star’s case for assistance after going into a trading halt on Friday.

“Our members are urging all parties to seek a sensible resolution to allow Star to continue as a going concern,” Mr Jones said.

“We welcome the positive comments from the Queensland Premier that Star’s case is being viewed favourably. We also recognise that the NSW Government has helped Star out in the past. The fact is Star’s underlying operations are viable businesses that can and should meet the highest levels of regulatory oversight.

“The impact of getting this wrong would be devastating for Star workers and their families, leaving them and their local communities reeling.”

Premier Steven Miles prepared for ‘worst case scenario’.

Mr Miles said it was not unusual for governments to enter into arrangements to allow projects with large capital costs, and big jobs dividends, to defer tax payments to the state.

He said Queen’s Wharf, which opened last Thursday, was a major bargaining chip when the Queensland government went to bid for the Brisbane 2032 Olympic Games.

Deputy Premier and Treasurer Cameron Dick said on Tuesday the state government was considering a raft of options to support Star, which is scrambling to raise $300m in short-term funding to keep its doors open.

“We are only at the preliminary discussion stage with Star and let’s see how that goes,” Mr Dick said. “We are looking at a whole range of things with Star to support their operations and importantly to protect new jobs at Queen’s Wharf. They may not need the support.”

That came after the NSW government appeared to cold-shoulder a similar approach by Star for help, saying it was the responsibility of The Star to maintain the financial viability of its business and “any NSW taxpayer assistance would primarily support The Star’s Queensland expansions.” NSW said its position had not changed, but pointed to an agreement it signed with Star earlier this year that legally bound it to maintain more than 3000 jobs in the state through to 2030. If staff headcount is less than the required number, the company will be required to pay the NSW government $25,000 for each headcount shortfall in a quarter.

Mr Miles said it was “a pretty disappointing” response from NSW and said his focus was on supporting thousands of workers at Queen’s Wharf.

Queen’s Wharf has emerged as a major Achilles heal for The Star, which also is facing the loss of its Sydney casino licence following the release of the Bell II inquiry last week that highlighted the company’s continuing regulatory failures.

Queen’s Wharf, which takes up 10 per cent of Brisbane’s CBD, faced cost overruns of at least $260m and opened two years behind schedule.

One possible scenario would see the break up of the company, with Queen’s Wharf being taken over by Star’s Hong Kong-based partners in the Destination Brisbane Consortium.

Pub king Bruce Mathieson, whose company is the biggest single shareholder in Star, could acquire the Gold Coast casino, while Star Sydney would be acquired by Blackstone, the owner of Melbourne-based Crown Resorts. Blackstone has declined to comment.

--additional reporting by Hayden Johnson and Judith Kerr