Star Entertainment shares suspended from Monday trading

There’s been another grim update in the saga of embattled gaming giant Star Entertainment, and it means 9000 jobs are moving closer to the edge.

Star Entertainment shares have been suspended from trading on the public markets again on Monday, spelling more trouble for the embattled gaming giant and its 9000 employees.

The Australian Securities Exchange notified the market of the suspension on Monday morning, stating shares in the company would be removed from trading after the company failed to lodge its half-yearly accounts on Friday.

Shares in Star Entertainment plunged more than 15 per cent on Friday afternoon after the company failed to disclose its half year results.

In a statement to the ASX on Monday, The Star Entertainment Group confirmed it needed to refinance its debt before it could resume trading.

“The suspension will continue until the 1HFY25 Report is lodged and the ASX determines that the Company’s shares should be reinstated to quotation,” the statement read.

“The Company is unlikely to be in a position to lodge its 1HFY25 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.”

The Company will continue to keep the market informed of material developments.

On Friday the board admitted there was “material uncertainty” about Star’s ability to continue as a “going concern”, meaning a collapse was potentially imminent.

“The company is continuing to explore possible liquidity solutions that might materially increase the Group’s liquidity position and anticipates that it will receive one or more liquidity proposals during the course of today,” the company said during Friday’s trading.

Star Entertainment is running out of cash. Picture: David Clark

United Workers Union casino director Andrew Jones said its members are worried about how they’ll afford mortgage and rents, feed their families and pay their bills if the casino collapses.

“Since 2020, workers at The Star have weathered covid- various Royal Commissions and Inquiries, and ongoing disruptions to business. They’ve shown remarkable resilience, but they need certainty about their futures,” Mr Jones said.

“The ongoing instability has caused huge levels of anxiety for our members, their families, and the broader hospitality community that depends on these venues. It needs to stop.”

Management scrambled to secure emergency financing for the crumbling $315m company over the weekend.

But Monday’s suspension from quotation means it is unlikely the company can sign off on its accounts and has been unable to reach any funding agreement.

The company is now slipping quickly towards administration, which will put the jobs of its 9000 employees in limbo.

Star operates casinos and hotels in Sydney, Brisbane and the Gold Coast.

The company is expected to inform the market of its position in more detail later on Monday.

The troubled gaming giant is running out of cash and confronting a severe downturn in revenues as an exodus of high rollers and cost-of-living pressures hit the business.

The view from the Sky Deck at Star’s new Queens Wharf complex in Brisbane. Picture: David Clark

In previous market updates the Star Entertainment said the company is spending about $50m per month, with only $79m left in the bank.

Morningstar analyst Angus Hewitt said at the time the embattled corporation could collapse by the end of February if it continued burning through cash at the same rate.

“We now incorporate a 50 per cent probability that Star falls into administration,” he said.

Both state governments in NSW and Queensland have offered little support for the embattled casino.

NSW Premier Chris Minns has refused to offer any support for Star Entertainment, saying the state doesn’t have the money to help casinos.

“I’ve said all I’m going to say about it,” he told reporters previously.

“We don’t have any (more assistance). We did sit down with Star over a year ago and work out a rescue package.

Queensland Premier David Crisafulli did not rule out help for the casino operator but said he would like to strike a “good deal” for Queensland taxpayers and the casino’s 6000 state workers.

Mr Crisafulli, who since coming to office in October has repeatedly insisted Star’s reported financial troubles was a matter for the company, previously said the state would come to the negotiating table.

It is also battling a tangled swirl of corporate watchdog investigations and penalties for serious failures at its operations.

In October 2022, the NSW Independent Casino Commission imposed a $100m fine on Star after finding the company had allowed money laundering to take place at its Sydney casino.

A report into the business also found the company had exploited vulnerable gamblers.

The company’s collapse has been slow but steady.

In July last year, the company held a market capitalisation of $1.5bn

More to come

Originally published as Star Entertainment shares suspended from Monday trading