Star Entertainment Races for Funding as Collapse Looms
Star Entertainment’s financial position isn’t in good shape, and it is seeking a cash injection to avoid a full-on collapse.
LISTEN TO THIS ARTICLE:Star Entertainment Speaks Out
The casino operator told ASX it expects to receive “one or more” liquidity proposals on Friday. This would allow it to continue operating.
The shareholders hoped Star could attract a new investor, secure new funding, or even sell some assets.Due to declining revenues, licensing problems, and other issues, Star has been on the brink of failure for weeks. It operates land-based casinos in multiple areas of Australia, including Brisbane, Sydney, and the Gold Coast.
As noted in the company’s recent ASX announcements, there remains material uncertainty as to the group’s ability to continue as a going concern.
Star's issues finally reached a boiling point last Friday morning when it failed to lodge its financial accounts.
It went into a trading halt from there, meaning investors couldn’t trade their shares. This was a sign that Star could no longer guarantee it would be able to operate.
Then, Star sent ASX another piece of information, saying that it is “continuing to explore possible liquidity solutions that might materially increase the group’s financial liquidity position.”
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What’s Next for Star
From here, trading will only begin if Star’s board can determine that funds will be incoming to keep the business afloat.
Star employs about 8,000 people. There could be a situation where the casinos continue to run as a search for a new owner is underway. However, there’s also the reality that it could be broken up entirely.
Star has faced some issues in the past, most notably including its facilitation for hundreds of millions of dollars in banned transactions and money laundering. This has resulted in a decline in the number of high rollers from Asia playing there. Shares in Star are trading at about $0.12. It was about $5 in early 2018.
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