Star Entertainment avoids Game Over as Ballys throws $300 Million lifeline
Put simply, the casino giant isn’t in the best financial shape right now. Investors have punished the casino’s share price for the last several years now, with recent price action bringing the stock to around its lowest levels on record. Shares in the embattled casino group hit an all-time low of 10 cents per share in intraday trading on Friday before closing the week at 11 cents. The operator of casinos in Sydney, Gold Coast and Brisbane was on the brink of collapse on Friday evening and had yet to lock in a short-term funding deal, according to several people involved in the discussions.
If Star Entertainment was to fall into administration, those administrators would take control of Star’s assets, including Queen’s Wharf, and its liabilities. Reaching a deal, Mr Hughes said, is of “existential” importance to Star. On Monday, the company notified the ASX that the deadline for termination has now been extended to July 31st.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. “I would note that the regulatory environment and challenges [of] technology upgrades and other matters we’re dealing with in Australia are quite unique to the Australian market. At its annual investor meeting in November, McCann and Star’s chair, Anne Ward, warned of the challenges ahead as its casinos struggled with the implementation of a ban on cash-based gambling – a measure to avert money laundering – which saw gambling on its poker machines dive.
Putting its share on hold last week, Star repeated a warning made early in February that without a rescue deal to pull in cash it may not be able to continue as a viable business. Cash-strapped Star Entertainment is set to offload its Brisbane casino in an 11th-hour deal that could rescue it from financial collapse. It is Australia’s second-largest casino, offering a vast array of gaming options, including poker, blackjack, and roulette, along with electronic gaming machines.
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“Queen’s Wharf became a drain because, as a 50 per cent joint venture, Star was on the hook for huge capital contributions and a big chunk of the project’s $1.4 billion debt,” Graeme Hughes from Griffith University’s business school said. Shortly after work began, Star’s share price opened at just over $5 — a record high. In all, the casino, four hotels, retail venues and restaurant spaces would cost an estimated $3.6 billion — Queensland’s biggest ever infrastructure project. Get the most out of your news with The Nightly app.
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As part of the Demerger, Tabcorp sought a ruling from the Australian Taxation Office on the taxation implications for shareholders. Eligible shareholders who wished to sell their shares under the Voluntary Share Sale Facility were required to return a Sale Instruction Form by the Closing Date. Payment of the sale proceeds were made to participating shareholders on 27 May 2016 in accordance with their payment instructions as recorded on the share register. In 2009, Tabcorp, the then-owners of Star City, announced an A$475 million refurbishment and expansion program called Project Star which involved the re-orientation of the casino towards Sydney Harbour, including a new “iconic” entrance as well as a drop-off zone on the harbour side of the casino site. “If they can’t arrive at a deal on a funding facility, they will likely go into voluntary administration in an effort to restructure their capital structure.
US casino operator Bally’s made overtures and last month reportedly sent a delegation to Australia to pursue a deal. He is still pursuing a deal with at least one party that would refinance the company’s loans. Star’s CEO Steve McCann is still searching for candy96.fun a deal to refinance the company’s loans to prevent it from collapsing. “We need to implement those, and we need to make sure that we understand what the revised revenue model is for our business across gaming and non-gaming over time,” McCann said at the meeting. The provisions are used when a financially struggling company is considering a last-ditch restructuring attempt as an alternative to financial collapse and calling in administrators.
