JPMorgan and Xingchun Wang Back Star Despite Challenges
Despite the casino operator facing mounting financial pressures, two major investors have increased their stakes in The Star Entertainment Group.
Major investors increase stakes in Star Entertainment Group.
LISTEN TO THIS ARTICLE:Filings from January 14 revealed that JPMorgan Chase & Co. and Xingchun Wang, a businessman with reported ties to Macau, are increasing their positions. JPMorgan Chase & Co., the global banking giant, now holds approximately 182 million shares, which represents a 6.3% stake. This event follows a similar stake purchase in October of 2024.
Xingchun Wang, who little is known about, increased his position from 5.5% to 6.5%, amounting to roughly 187 million shares. Wang is now Star’s second-largest shareholder, behind only Chow Tai Fook, which holds a 9.6% stake and is a key partner in the Queen’s Wharf project.
Financial Struggles Test Investor Confidence
Star reported on January 8 that its cash reserves had fallen to AU$79 million by the end of 2024. This total includes the first AU$100 million tranche from a new debt facility accessed in December.
In the last quarter of 2024 alone, Star’s available funds dropped by AU$107 million. The company gave several reasons for the decline, including “difficult trading conditions”, contributions to the Queen’s Wharf joint venture, legal and consulting expenses, and the first AU$5 million instalment of an AU$15 million fine imposed by New South Wales (NSW) regulators after the Bell Two inquiry.
Star still has access to another AU$100 million tranche of debt funding, but the company acknowledged that meeting the requirements to draw on it remains a challenge.
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Regulatory Hurdles and the Road Ahead
The increased stakes from key investors come as Star faces intense scrutiny from regulators. The NSW Independent Casino Commission is set to reassess Star’s license at the end of March. A negative outcome could further threaten the company’s financial stability.
Peter Cohen, a Melbourne-based consultant and former regulator, has voiced concerns over Star’s viability, suggesting the company may be nearing what he called the “death zone”, where remaining financially sustainable could become impossible.
Cohen also noted that government bailouts are rare for gaming operators, as state authorities are often reluctant to appear overly supportive of the industry.
While the increased investment from JPMorgan and Xingchun Wang demonstrates some confidence, Star’s problems with cash flow, regulatory compliance, and operational stability remain significant threats to its future.
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