‘Material uncertainty’ about Star’s survival
Star Entertainment Group says its directors are relying on “safe harbour” provisions to protect them from personal liability for trading while insolvent.
Star Entertainment Group says material uncertainty remains as to its ability to continue as a going concern given the precarious state of its finances.
The troubled casino group said Monday it suffered a $8 million loss and its revenue fell 15 per cent to $299 million for the three months to December 31.
Star reiterated on Monday it finished the quarter with just $78 million in available cash, down from $149 million three months ago.
It was exploring options to shore up its finances, but there was no guarantee those negotiations would be successful.
“In the absence of one or more of those arrangements, there remains material uncertainty as to the group’s ability to continue as a going concern,” Star said.
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Its directors are relying on the “safe harbour provisions” of the Corporations Act, meaning they are relying on external advice to protect them from the personal liability that would typically come from trading while insolvent.
Star also said it had commenced a “cost-out program” – typically corporate jargon for lay-offs – targeting at least $100 million in annualised cost savings.
Star said the mandatory carded play and $5000 cash limits that began at the Star Sydney on October 19 had led to a 16 per cent drop in revenue there, compared to its four-week daily average.
That cash limit will drop to $1000 by August 19.
Late Monday morning, Star shares were down 7.1 per cent to 13 cents.
