Star Entertainment is likely to delay the announcement of its refinancing plan.
The initial plan was for new funding to be announced on Wednesday and for the stock to resume trade on Friday, but it may be one or two days later.
The understanding is that the $100m being offered by lenders in a fresh funding deal comes after banks that had been providing a $150m working capital facility prohibited Star from drawing down any more of the funds. Some $30m has already been accessed.
It is understood the working capital was provided by a few lenders, including Westpac.
The new $100m loan will probably come at a higher cost but the burden is likely to be spread among a larger pool of lenders, and a further $100m may follow, subject to conditions such as an equity raising.
Some smaller lenders are understood to have opted not to provide additional funding.
Star also has a $300m term loan with a syndicate headed by Macquarie and Deutsche Bank and including Barclays, Soul Patts and Regal and ARCM. McGrath Nicol and Gilbert + Tobin are advising lenders on the term loan.
Star chief executive Steve McCann travelled to Hong Kong last week for talks with joint venture partners Chow Tai Fook and Far East Consortium on the $3.6bn Queens Wharf Brisbane hotel and casino complex development.
The pair each own 25 per cent of the project. Star owns 50 per cent and the casino licence.
The 12ha project has been opening in stages from last month. It includes four new luxury hotels, a myriad of new restaurants, bars and entertainment facilities, luxury retail and an Event Centre in the Brisbane CBD.
It is understood the project’s Asian partners are unhappy with the investment that has faced cost blowouts in the hundreds of millions of dollars.
In addition to the $300m term loan and working capital for Star, there is $1.6bn of debt on Queen’s Wharf Brisbane involving different lenders and without covenants. Lenders are unlikely to be prepared to tip in $1.6bn again due to problems with the construction of the complex.
Of the 1000 hotel rooms earmarked to be developed, only about 340 have been built. The project also faces legal action from retail tenants over delays.
It’s a challenging time for the Barrenjoey-advised Star, which owns casinos in Sydney, Brisbane and the Gold Coast.
Not only is it in negotiations with the NSW and Queensland governments over renewing its casino licence, it has about eight or nine groups in its lending syndicate to contend with as it waits to learn of the extent of fines for money laundering breaches.
The Treasury building in Brisbane owned by Star has been sold for $67.5m.
The casino operator is suspended from trading on the ASX and it is understood Star’s debt in the secondary market has traded at 90c in the dollar or less in the past.
A second damning report from the NSW Independent Casino Commission into Star was recently released, with chief commissioner Philip Crawford saying the company “had not moved quickly enough to address the governance and cultural concerns raised in the first … report”.
Shares were halted at 45c and Star’s market value is $1.3bn, but they are expected to fall sharply when it resumes trade.
Major shareholders include billionaire publican Bruce Mathieson with close to 10 per cent and Wilson Asset Management, which holds about 4 per cent.
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