Star’s chips down as $940m debt deal comes off table
Embattled casino giant Star Entertainment is back on the brink of collapse after a refinancing deal fell through, but talks with a US casino giant continue.
Star Entertainment has failed to secure a $940 million lifeline to cover its eye-watering debts, throwing the future of the casino operator and 9000 jobs into question.
The Star announced in March it had entered into an exclusivity and process deed with property development fund Salter Brothers Capital for the deal, which had “sufficient liquidity” to cover the group’s arrears.
“The Star has continued to work diligently with Salter Brothers Capital in relation to the Refinancing Proposal,” the company said in an ASX announcement on Wednesday.
“But (it) has not received a binding debt commitment letter and the Refinancing Proposal has now been withdrawn.”
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The Star has been in a trading halt since the end of February after being unable to file its half-year financial report without a refinancing plan to save it from the brink.
The withdrawal came after extensive consultation with Salter Bros, state governments and regulators, The Star said.
Certain deal conditions couldn’t be met in time to cover The Star’s liquidity needs.
Once worth billions of dollars, the casino group has been smashed by the fallout of unlawful acts and poor corporate behaviour uncovered in several state inquiries.
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Regulators have slapped it with fines totalling more than $210 million.
But they have been cautious to close its doors, noting the devastating impact that would have on 9000 employees.
The group has kept its head above water in recent weeks by offloading its 50 per cent stake in a new Brisbane precinct and a $250 million short-term bridging loan.
The Star said it continued to explore a separate $250 million equity deal with US casino giant Bally’s Corporation for a minimum 50.1 per cent stake in the company.
“However, there remains material uncertainty as to the group’s ability to continue as a going concern,” the announcement said.
The Star has faced fines and licence cancellations since 2022 when an inquiry found damning evidence of money laundering and counter-terrorism failings at the groups’ Sydney casino.
A probe in 2024 found more breaches, including incidents of fraud and false welfare checks being logged on vulnerable customers.
A Queensland inquiry found The Star actively encouraged people banned from gaming in Victoria and NSW to its casinos in the Sunshine State.
Last week NSW and Queensland authorities extended the appointment of former rugby league executive Nicholas Weeks to oversee Star Sydney and its Gold Coast facility until September.
