The Star Entertainment Group has declared a significant alteration to its financial structure and has stopped trading on the Australian Securities Exchange (ASX).
The ASX, at the request of the Star Entertainment Group, has permitted a halt in trading on the ASX, effective immediately (September 25), until the commencement of trading on September 27. Shares of the Star Entertainment Group will not be traded during this period.
Meanwhile, the Star Entertainment Group has formulated a set of financial structure initiatives for the organization. At the heart of this is the acquisition of AU$750 million (GBP394.3 million/EUR453.3 million/USD482.2 million).
The Star Entertainment Group has also reached an agreement with Barclays Bank and Westpac Banking Corporation for new debt financing of AU$450 million. This includes a AU$150 million four-year revolving credit facility and a AU$300 million four-year underwritten term loan.
The Star Entertainment Group stated that this will allow them to repay and cancel all existing debt and provide more adaptable support for ongoing operations and funding requirements. The debt maturity date is not before the second half of 2027.
“This announcement is a crucial turning point in the Star Entertainment Group’s transformation,” said Robbie Cooke, CEO and Managing Director of the Star Entertainment Group. “By optimizing our financial structure, strengthening our financial position and increasing flexibility, we have a solid foundation to carry out our transformation plans and strategic objectives.”
Shares of the Star Entertainment Group have declined to AU$2.
Star Entertainment Group is confronting a significant financial challenge, revealing a substantial loss of 4 billion Australian dollars for the entire fiscal period. This follows the company’s declaration of a full-year deficit of 2.4 billion Australian dollars last month. The company has attributed this shortfall to impairment charges for its gambling establishments in Sydney, the Gold Coast, and Brisbane.
The company invested 2.8 billion Australian dollars in “significant undertakings” during the fiscal year concluding on June 30, 2023. This comes after a series of fines and penalties the company has received in recent years.
The company’s financial losses encompass a non-cash impairment of 2.2 billion Australian dollars for goodwill and property holdings at Treasury in Sydney, the Gold Coast, and Brisbane. Furthermore, the company incurred 595 million Australian dollars in regulatory and legal expenses, 54 million Australian dollars in debt restructuring expenses, and 16 million Australian dollars in redundancy costs.