Troubled casino operator Star Entertainment on cusp of its make or break moment
It’s crunch time for Star Entertainment chief executive Steve McCann as a deadline to finalise a $900m refinancing package fast approaches.
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It’s crunch time for Star Entertainment chief executive Steve McCann with a deadline to finalise a $900m refinancing package only 48 hours away as the troubled casino operator’s major shareholder warns the company’s future is still in a state of in flux.
Despite a rival offer from US casino operator Bally’s Corporation for Star, Mr McCann has pinned the future of the company on the refinancing lifeline being offered by Melbourne-based investors Salter Brothers Capital.
The company flagged earlier this month it was in exclusive talks about the refinancing proposal that would allow it to avoid falling into administration.
At the same time, it revealed it was offloading its debt-laden Queen’s Wharf property in Brisbane to its Hong Kong partners, Chow Tai Fook Enterprises and Far East Consortium.
Star said last week that discussions over the refinancing, which had been scheduled to wrap up last week, would be extended another week to April 1 to allow the finalisation of the deal. It is understood that could be further extended as Mr McCann seeks the best terms.
Bally’s, headed by New York hedge fund manager Soo Kim, is offering to recapitalise Star with $250m, under a deal in which it would take control of the company.
The Bally’s unsolicited offer is unlikely to derail the refinancing and the Queen’s Wharf deal, which will see Star gain full control of its Gold Coast property and future development opportunities.
Star’s single largest shareholder pub billionaire Bruce Mathieson, who holds just under 10 per cent of the company, had initially backed the Bally’s deal but on Friday said there were still a lot of uncertainties about which deal would get over the line.
“We will just have to wait and see,” Mr Mathieson said.
The deal to sell Queen’s Wharf was complicated last week following the release of a previously confidential probity inquiry into Chow Tai Fook’s links to a notorious Macau gambling identity Alvin Chau, who has since been sentenced to 18 years in jail after being convicted of operating illegal gaming activities.
CTFE was forced to quietly apologise to Queensland regulators in late 2023 for “inadvertently” concealing the company’s relationship with Chau, to avoid being stripped of its suitability to hold a casino licence.
Then Attorney-General Yvette D’Ath decided in May last year there was “insufficient evidence” to find CTFE or its associates were unsuitable to hold a casino licence.
A spokesperson for Queensland Attorney-General Deb Frecklington said Friday that the Crisafulli Government had delivered on its election commitment to release the probity report.
The spokesperson said the Office of Liquor and Gaming Regulation (OLGR) closely monitored all licence operators in Queensland and was satisfied that “there is proper oversight of the current casino licence arrangement at Queen’s Wharf.”
Chow Tai Fook Enterprises last week said it remained fully committed to Queen’s Wharf and welcomed the government’s affirmation of suitability.
“As the Queensland Government announces its stadium and infrastructure plan and orients the state towards a successful 2032 Olympics, we very much look forward to playing our part through the continued development of Queens Wharf,” a spokesman said.
Meanwhile, the NSW Independent Casino Commission (NICC) said Star’s Sydney casino licence would remain suspended until September as it continued to work on its remediation plan and warned the company’s financial future remained uncertain.
NICC chief commissioner Philip Crawford said steady improvements had been made by Star but uncertainty around its financial situation “meant that progress was slow, and The Star’s licence suspension should remain in effect.”
“The next six months is a critical phase for The Star as it will need to show further progress with its remediation activities while also stabilising its finances,” Mr Crawford said.
Star accepted that special manager Nicholas Weeks should remain in his role for a further six months while remediation efforts continued.
Two inquiries into Star’s casinos, known as the Bell Inquiries, have identified serious misconduct and failures of compliance and governance.
Star’s NSW casino licence has been suspended since October 2022 when the NICC fined the company $100m and first appointed the external manager.
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Originally published as Troubled casino operator Star Entertainment on cusp of its make or break moment
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