Struggling Star Entertainment escapes eclipse with last-minute deal
The struggling operator Star Entertainment has secured a last-minute deal to sell its stake in its Brisbane complex to its Hong Kong partners, Chow Tai Fook Enterprises and Far East Consortium Enterprises.
This agreement will see the Hong Kong partners paying A$53 million ($33.4 million) for Star’s stake in the Brisbane project, Far East said in a on the Hong Kong Exchange (HKEX). The first payment of A$35 million will be made on 7 March (Friday). The deal injects crucial funds into the company’s nearly empty coffers.
Star still needs a permanent solution
The deal with its Hong Kong partners has averted Star’s imminent collapse, but chief executive officer Steve McCann would have only a few months to come up with a more permanent solution. Else, the company could be heading into administration. In addition, earnings remain under pressure as the broader Australian economy faces a cost-of-living crisis and analysts expect Star to lost money for years in its current state. Star has to deal with another blow in the form of a hefty fine of possibly around A$330 million from the Australia’s financial crimes regulator. The sum, an estimate by analysts, is for alleged breaches of anti-money laundering laws by the Star.
In February, the operator revealed that it has been in talks with Hong Kong-listed partners, Chow Tai Fook Enterprises Limited (CTFE) and Far East Consortium International Limited (FEC), have shown interest in acquiring the controlling 50 percent stake in the Destination Brisbane Joint Venture (DBC) which owns The Star Brisbane integrated resort. The Star confirmed the proposals, which were then knocked back. The company said that it has received the proposals and concluded “that none of the proposals have provided sufficient value for The Star.” The company also briefly considered a $650 million financial lifeline over five years by Oaktree Capital Management.
Star’s struggles soar
The struggling Star, once one of the leading 바카라 operators in Australia, has been facing significant financial struggles and regulatory scrutiny over the past few years, dealing with regulatory fines, failed asset sales, and dwindling cash reserves. Earlier this week, 3 March (Monday), shares of the embattled 바카라 operator were suspended from trading on the public markets. This was owing to the operator failing to lodge its half-yearly earnings report on 28 February (Friday).
The Australian Securities Exchange (ASX) notified the market of suspension on Monday. In a statement to the ASX on Monday, Star confirmed that to disclose its half yearly results, the company needed to refinance its debt. The company’s shares tumbled over 15 per cent on Friday after the company failed to disclose the figures.
In January, the company recently reported that its cash balance dropped to AUD 79 million by December 2024, down from AUD 150 million just six months earlier. Additionally, Star has already used half of its AUD 200 million debt facility, leaving limited room for manoeuvre.
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