‘Steve will sort it’: Pubs king Bruce Mathieson shrugs off Star share wipe-out

Star Entertainment’s largest shareholder, pub baron Bruce Mathieson, will remain a long-term backer of the casino operator despite the company losing half its value on Friday.

Star Entertainment’s largest shareholder, pub baron Bruce Mathieson, will remain a long-term backer of the casino operator under new chief executive Steve McCann, despite the company losing half its value on Friday amid an ongoing cash crunch.

Mr Mathieson, whose private interests own 9.59 per cent of Star, said the former Crown Resorts boss had put Star in a stronger position and he was not concerned about the one-day slump in its shares, which saw $574m wiped from its market value.

Star plummeted as much as 51 per cent on Friday after it came out of a four-week trading suspension and following the release of its results the previous day, revealing a $1.69bn loss. The shares ended down 44.4 per cent at 25c, cutting its market capitalisation to $717m.

Mr McCann this week unveiled a $200m financial package that he hopes will give the company enough “liquidity runway” to survive while its new Queen’s Wharf precinct in Brisbane reaches full trading potential.

“Steve will get things sorted out,” said Mr Mathieson, who saw the value of his holdings in Star slump $55m to $68.75m on Friday. “You have got to have people who are in there who know what they are doing.”

Mr Mathieson said he was less worried about Star than he was about Endeavour, the pubs and pokies group built up by his family that was later taken over by Woolworths.

“A board can kill you and we have seen that with Qantas and Channel 9 and that is why you need people in charge who know what they are doing,” he said.

Mr Mathieson said he was unfazed about the slump in Star’s shares as he took a long-term view of its prospects. “It still has great assets,” Mr Mathieson said. “If you haven’t sold anything, you haven’t lost anything. I am a long-term investor.”

Star Entertainment Group chief executive Steve McCann.

Star’s shares had been suspended by the ASX since September 2 after it failed to lodge its annual results by the required time in late August. Its delayed results announcement revealed 2024 losses of $1.69bn, after $2.44bn in red ink the previous year, as it faced the possible loss of its Sydney casino licence and torrid trading ­conditions.

Mr McCann told analysts on Thursday that the group was looking to slash up to 350 jobs and offload hotels and other assets after warning it faced significant liquidity challenges – even with the $200m in emergency funding.

Star, which has been teetering on the edge of a financial collapse due to a $300m cash crunch, said it was slashing $1.44bn from the value of its casinos.

Mr McCann warned that the company was “on its knees” and he needed to cut $100m in costs to turn the business around.

It is understood the first of a series of asset sales by Star – the sale of the old Treasury casino building in Brisbane to Griffith University for $67.5m – settled on Friday.

Star also is looking at a series of other assets sales, including the Darling hotel properties in Sydney and on the Gold Coast, which could raise up to $300m.

Star’s financial problems have been exacerbated by its continuing regulatory missteps. The company was expected by Friday to respond to a show cause notice issued by the NSW Independent Casino Commission (NICC) that could result in the loss of its Sydney casino licence. The notice followed findings of regulatory failures by Adam Bell SC in his second inquiry into the company earlier this year.

Billionaire pubs baron Bruce Mathieson: ‘Steve will get things sorted out.’ Picture: Glenn Hampson

Star’s formal response, which will remain confidential because it contains commercially sensitive information, will allow the NICC to make its final decision within the next month. It is understood Mr McCann’s transparency about the troubled group’s shaky finances has been welcomed by the regulator, but it will be seeking more information on its long-term prospects.

A case against former directors by the corporate watchdog ASIC is on track to start in the Federal Court in February.

ASIC told Federal Court judge Michael Lee on Friday that the watchdog’s submissions would be finalised by the end of October.

The former directors are being sued over claims they failed to reduce money laundering risks and criminal links. The case involves claims against board members serving between 2017 and 2019 – former chair John O’Neill, ex-CEO Matt Bekier and directors Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin, Benjamin Heap and Zlatko Todorcevski. All have lodged defences.

ASIC deputy chair Sarah Court has previously said: “Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations, which are inherent in the operation of a large casino with an international customer base”.