Star says talks with lenders continue on rescue plan

Troubled Star Entertainment Group has signalled it’s no closer to finalising a $300m rescue plan and remains in lock down talks with lenders, governments and regulators.

Talks continue with The Star’s banker and financiers.

Troubled Star Entertainment has signalled it’s no closer to finalising a $300m rescue plan as it remains locked in talks with lenders, governments and regulators. Star told the ASX on Wednesday it was continuing to work with stakeholders and advisers in respect of its financial position.

“These discussions are ongoing and involve, among others, state governments, regulators and the company’s lenders,” Star said. As talks were ongoing, it was not in a position to finalise its preliminary annual financial report.

“The Star will provide a further update in relation to these matters when it is able to do so,” the announcement said. The company’s shares will remain suspended until the financial report has been released.

The Star has been suspended from trading for more than a week, signalling chief executive Steve McCann is facing challenges in getting financiers to sign off on a much-need cash injection amid cost overruns at its $3.6bn Queen’s Wharf project in Brisbane and regulatory missteps.

The Star is also seeking tax relief from both the Queensland and NSW state governments in a bid to keep its doors open. Queensland Premier Steven Miles confirmed last week his government was in talks about possible deferral of tax payments to protect almost 3000 jobs at the just opened Queen’s Wharf.

Star Entertainment Group chief executive Steve McCann in lock down talks.

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.

NSW appeared to cold-shoulder an 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.”

Star’s shaky finances are now being scrutinised by regulators, in particular the NSW Independent Casino Commission (NICC), which is yet to decide on the company’s suitability to retain its Sydney casino licence.

Star delayed its annual results announcement on the same day the NICC released the findings of the second inquiry by Adam Bell SC that found The Star was continuing to fail standards required of a casino ­operator.

Star last week confirmed it was reviewing its position with various advisers as it tries to finalise its accounts. “(This includes) holding discussions with various stakeholders in relation to its liquidity position in light of adverse trading and other conditions,” a statement said. Star also confirmed it was considering the application of provisions of the Corporations Act, including 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. Mr McCann may be prepared to extend the current lock down talks for another week in order to get agreement on the omnibus of challenges facing Star, which also includes a fine from Austrac that could be as much as $350m.

Meanwhile, former Star Entertainment directors being sued over claims they failed to halt money laundering risks and criminal links creeping into its operation are on track to be tried by the corporate cop in a blockbuster civil case beginning in February.

During a brief hearing in the case on Wednesday, first launched by the Australian Securities Securities and Investments Commission in 2022, Federal Court judge Michael Lee urged ASIC and the parties to ensure the trial starts on time come “hell or high water”.

It is scheduled to run for about six weeks, from February 10, and concerns claims about Suncity arranging junkets for high-roller overseas customers.

Originally published as Star says talks with lenders continue on rescue plan