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Struggling casino operator The Star Entertainment Group is seeking hundreds of millions of dollars in additional funding from investors as it seeks to avert financial collapse.
Its major investors, including billionaire Bruce Matheson, have backed Starr heavily by raising $1.55 billion in cash in the past year alone, leaving the company now worth just $1.3 billion, based on the last time the stock traded on Thursday afternoon.
Steve McCann, the new CEO of Star Entertainment, is trying to stabilize the casino operator's finances while keeping its Sydney license remains in doubt. credit: Dominic Lorimer
The next 24 hours are expected to be crucial for the casino operator, which is due to release its delayed annual results on Monday. Star Entertainment will need to prove it has the funding to stabilise its underperforming casino business, as well as fix integrity issues that have put the company’s retention of its Sydney casino licence in doubt.
The company was reportedly seeking investors to raise $300 million last week through a convertible bond issue before the final report from Adam Bell’s second investigation into Sydney casinos on Friday found the company was still unfit to hold a licence. The report did not recommend revoking the licence.
The public release of the report has delayed the release of Star's full-year results, which were due on Friday.
Star Entertainment’s latest results are expected to reveal huge write-downs on its new Brisbane casino, Queens Wharf, which cost almost double the initial $2 billion estimate and comes at a time when casinos across the country are struggling due to the cost of living crisis and waning tourism interest. Queens Wharf is a joint venture with Chow Tai Fook Enterprises and Far East Consortium.
Star Entertainment CEO Steve McCann, who previously led Crown Resorts until its acquisition by US private equity group Blackstone, joined the company in June.
“I recognize that there are many complex issues and challenges that the company must address,” McCann said in announcing his appointment.
“I am committed to working with the Board and various stakeholders to help drive change, restore trust and achieve a sustainable solution.”
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