Star Entertainment Weighs Assets Sale after Billion Dollar Loss
Australia's second-largest casino operator, Star Entertainment, has published its annual results, revealing a multibillion-dollar loss for the second consecutive year.
Star Entertainment's latest trading update reflects the turmoil that has plagued Australia's casino sector for years.
LISTEN TO THIS ARTICLE:The company's casino valuation plummeted by A$1.4 billion, primarily due to tough market conditions and regulatory pressures, including mandatory cashless gambling. The write-down contributed to an A$1.7 billion net loss, down from A$2.4 billion in the previous year.
$200 Million Debt Relief Package
The delayed annual results were announced today, September 26, just a day after Star Entertainment secured a new debt facility. The casino group negotiated the new $200m facility from corporate lenders to provide relief amid its ongoing financial challenges. The funds will refinance $116 million of its existing debt from $450 million to $334 million. $100 million will support its Queens Wharf resort development in Brisbane.
The funding will be disbursed in two tranches. The first is expected to be available from late October to December 20 and is subject to meeting specific conditions. The second tranche will come with stricter terms, including raising at least $150 million in additional capital and providing comprehensive long-term strategy insights.
However, to gather additional funds amid the precarious state of the gaming industry, Star Entertainment has also announced its plan to sell A$300 million worth of non-core assets.
More Business News
Challenging Year for Star Entertainment
Star Entertainment's latest trading update reflects the turmoil that has plagued Australia's casino sector for years. Simultaneous anti-money laundering inquiries and CoVID-19-related closures have crippled tourism and forced prolonged closures.
The Star is also likely to face stricter regulations and significant fines following a recent government-mandated inquiry, which issued a damning report on its governance practices at its Sydney casino and deemed it unsuitable for licensure.
Earlier this month, the casino group was suspended from trading on the Australian Securities Exchange (ASX) after missing the 60-day deadline to submit its annual financial report.
However, according to the company's CEO, Steve McCann, the stock is expected to resume trading on Friday.
Analysts have suggested that Australians' dwindling savings foretell a more difficult period for the gaming industry, and unless Star Entertainment attracts its former Chinese clientele, who drove most of its revenue, servicing its latest debt package will be a significant concern.
RELATED TOPICS: Business
Latest News
Most Read
Must Read
Interviews
Review this New Post
Leave a Comment
User Comments
Comments for Star Entertainment Weighs Assets Sale after Billion Dollar Loss