Star Entertainment Group has finally secured a multimillion-dollar lifeline as it prepares to unveil a dismal set of numbers for the 2024 financial year, almost a month after the end of reporting season.
The casino operator told the ASX late on Wednesday it had received commitments from lenders to issue a new loan of up to $200 million across two tranches, the first of which is expected to be drawn from next month to quell a cost blowout at its newest casino precinct in Brisbane that is at the heart of its financial distress.
The Star has finally secured a lifeline after failing to issue its financial results for almost a month.Credit: Edwina Pickles
The emergency loan puts an end to extensive discussions between The Star’s new boss Steve McCann, lenders, investors and state governments, following a torrid period that brought the group to the brink of insolvency.
The battered business operates three casinos in Queensland and NSW and has been stung by a combination of poor trading conditions, increased costs and looming remediation penalties since it was disgraced for extensive money laundering and counterterrorism failings in 2021.
Sources close to the company, not authorised to speak publicly, told this masthead that they were readying for The Star to release its financial results as soon as Thursday morning, after securing the new debt facility.
Loading
The Star already had a $450 million loan which has been reduced to $334 million and is fully drawn. That debt sits with lenders including Barclays, Westpac and Macquarie. The Star’s debt will mature in December 2027. It will also retain up to $34 million of bank guarantees under the existing credit facility.
The casino operator reported a $2.44 billion loss in 2023, with former chief executive officer Robbie Cooke claiming at the time that the worst of its horror two years – marred by financial and regulatory scandals – were behind it. However, a second inquiry into its culture and a multi-million dollar cost blow out of its new joint-venture in Queensland forced the struggling business further into the red for the 12 months to June 30.
The Australian Financial Review said in a report that The Star will post even less revenue and earnings before interest, tax, depreciation and amortisation for fiscal 2024, and has been preparing to issue a $1.4 billion writedown of the group’s assets.
