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Star Entertainment Announces Funding Injection Worth 800 Million Australian Dollars

Posted on March 3, 2023 | 8:25 am
star-entertainment-announces-funding-injection-amid-au1.26bn-loss

Star Entertainment, the beleaguered Australian owner and operator of land-based casinos, has announced that it raised 800 million Australian dollars in equity in order to balance the books after the loss recorded in the first half of the 2022-2023 fiscal year.

The company lost over 1 billion dollars during the first half of the fiscal year, mainly because of a non-cash impairment of the group’s Sydney assets worth no less than 988 million Australian dollars, resulting from costs and penalties associated with the company’s regulatory difficulties.

In 2022, an inquiry requested by the government of New South Wales into the company’s anti-money laundering and safe gambling procedures found that Star Entertainment was unsuitable to hold a casino license in the state.

The company did continue to operate its casino in Sydney but had to undergo a transformation that cost a lot of money, attempting to change the operations in order to prevent the license being canceled altogether.

Speaking about the company’s difficulties, Robbie Cooke, the Chief Executive Officer and Managing Director of Star Entertainment underlined the fact that the operator’s top priority is to regain the trust of the public and of the government authorities.

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“Our focus has been and remains on working constructively with our regulators and the NSW manager and Queensland special manager to urgently remediate our businesses as we seek to return to suitability,” Robbie Cooke said.

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Poor Financial Performance

Star Entertainment did manage to increase its revenue compared to the previous year during the six months ending 31 December, but the company’s costs led to an overall loss of 1.08 billion Australian dollars. That loss was higher than the corresponding half of 2021 by no less than 986 million Australian dollars.

A big chunk of that loss can be attributed to fines and penalties as Star Entertainment had to pay 350 million Australian dollars overall as it was handed fines both in New South Wales and Queensland.

The equity raising worth 800 million Australian dollars will provide the casino operator a financial boost, allowing it to repay outstanding debts and increase the overall liquidity. Star Entertainment has also managed to renegotiate its relationship with its creditors, securing covenant relief from bank lenders.

Source:

“Star announces funding injection amid AU$1.26bn loss“, igamingbusiness.com, February 24, 2023.

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