At the end of last week, we reported that Star Entertainment was forced to return to the negotiation table alongside creditors to deal with its reported AU$1.69 billion ($1.08 billion) annual loss and the overall shaky ground projected for the new financial year.
Now, the group that recently sold its leasehold interest in the historic Treasury Building in Brisbane to Griffith University following the closure of the Treasury Casino in August 2024 has announced its shares recorded a brisk rise of 18% to AU$0.30 ($0.21) per share on September 30.
Despite the slight rebound, the share price is still 40% lower than its previous level of AU$0.50 ($0.35) prior to the release of last week’s financial results.
What Triggered the Rise
The iconic Australian gambling and entertainment company recently managed to successfully negotiate an AU$200 million ($138.9 million) credit to be drawn in two separate tranches, in October and December.
The emergency funding, however, will be charged at an approximate interest rate of 13%.
The figure showcases the high level of risk tied to the deal. Also, in the past year, Star Entertainment went down 51.6%.
The recent boost in shares, which took many by surprise in the context of the stock’s hammering following a month-long trading suspension, could be attributed to the fact that the struggling casino operator has completed all the necessary steps for the big sale of its Brisbane casino.
The sale, valued at AU$60.5 million ($41.88 million), as per Friday’s ASX release, is expected to further help the group navigate the difficult liquidity situation it is confronted with.
The Star Did Not Move Quickly Enough
The group that has moved forward to the new AU$3.6 billion ($2.4 billion) Queen’s Wharf project that will feature a new casino has told investors that it has submitted a formal response to the New South Wales Casino Commission (NICC) following the withering findings of the second Bell report.
The second inquiry into Star’s operations in New South Wales that was released in August resulted in a highly critical report, once again declaring the company unfit to run a casino in the state.
The NICC replied by issuing a Show Cause notice explaining why the operator should not take disciplinary action against it.
NICC’s chief commissioner, Philip Crawford, remarked at the time that the Bell Report revealed a company “that had not moved quickly enough to address the governance and cultural concerns” raised in the first report.
The commissioner added that The Star “has only very recently turned its attention to dealing with challenges that should have been prioritized earlier.”
Additional Papers Submitted
Besides the responses to the Show Cause, the group also submitted a series of other documents to the NICC.
The papers covered The Star Sydney’s eligibility to retain its casino license, the progress made by its remediation plan, a strategy proposal aimed at resolving its financial problems, and the company’s current financial standing.
In spite of the company being poised to obtain tax relief from the Queensland Government as an additional avenue to further support its liquidity position, the deal fell through after The Star refused to cancel executive bonus packages.
While Monday’s leap in shares may provide some relief in the short term, investors are still concerned regarding the company’s uncertain outlook in the long run.
Source : GamblingNews
Author : News7
Publish date : 2024-09-30 14:53:00
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