Star sells event centre in bid to raise much needed cash
Troubled casino group Star Entertainment says it has sold its Sydney event centre for $60m as it attempts to rake in enough cash to avoid a financial collapse.
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Troubled casino group Star Entertainment says it has sold its Sydney event centre as it attempts to rake in enough cash to avoid a financial collapse.
Star told the ASX it will offload its Sydney Event Centre to Foundation Theatres for $60m in a deal which also includes additional spaces within The Star Sydney complex.
Star has been in a desperate bid to raise cash after revealing it had burnt through more than $100m in the final three months of last year. It warned earlier this month it may not have enough funds to continue as a going concern.
Star Entertainment chief executive Steve McCann last year announced the cash-strapped company would embark on a series of asset sales to raise money.
It has already sold the leasehold of the heritage-listed Treasury Casino building in Brisbane to Griffith University for $67.5m, with Mr McCann signalling its hotel properties on the Gold Coast and in Sydney are also on the block.
The Sydney event centre, which has direct access to the group’s hotels and casino, has a main event room which can seat up to 1400 people as well as outdoor space and corporate suites.
Foundation Theatres, which also operates the Capitol Theatre and Lyric Theatre in Sydney, will pay the $60m into escrow this week.
On completion of the deal, the funds will be held in a special account established under the terms of the group’s debt facility.
Mr McCann said the company would continue to “work on a number of other potential non-core asset transactions.”
“The Star has worked closely with the team at Foundation Theatres since they acquired the sublease for the Sydney Lyric in 2011,” said Mr McCann.
“We are pleased to partner with them as part of the continued evolution of our broad entertainment offerings at The Star Sydney.”
Star has already used the entire $100m loan offered to it by a banking consortium last year, and it is struggling to meet stringent conditions so it can draw down on another $100m.
Star also has about $1.6bn in debt for the new Queen’s Wharf in Brisbane which needs to be refinanced by December 2025.
Star’s plight follows a series of damning public inquiries which concluded the company is unsuited to hold a licence, as it turned a blind eye to the risk of money laundering and other criminal activities.
The NSW Independent Casino Commission (NICC) in October last year stopped short of cancelling the licence for Star’s Sydney casino after uncovering a litany of regulatory failings flowing from the Bell II inquiry.
Star was fined $15m and its casinos in NSW and Queensland remain under the supervision of a government-appointed manager.
Star has set aside $150m in cash in case it has to pay fines over separate action taken against it by federal money laundering regulator Austrac. According to some analysts, the fines could exceed $300m.
Star shares have plummeted almost 40 per cent so far this year. At market open on Wednesday, SGR was 8.7 per cent higher to 13c.
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Originally published as Star sells event centre in bid to raise much needed cash
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