The Star Entertainment Group has declared a significant capital reorganization strategy, leading to a temporary halt in trading on the Australian Securities Exchange (ASX).
Trading of the company’s stock has been suspended on the ASX, commencing today (September 25) and continuing until the commencement of trading on September 27. The ASX has granted approval for this trading suspension at the request of Star Entertainment Group.
Concurrently, Star Entertainment Group has formulated a set of capital structure modification measures. The primary component entails a financing arrangement of 750 million Australian dollars (394.3 million pounds/453.3 million euros/482.2 million dollars).
Star Entertainment Group has also secured an agreement with Barclays Bank and Westpac Banking Corporation for a new debt financing arrangement amounting to 450 million Australian dollars. This encompasses a revolving credit facility of 150 million Australian dollars with a four-year term and an underwriting loan of 300 million Australian dollars, also extending for four years.
Star Entertainment Group stated that this arrangement will facilitate the repayment and cancellation of all existing debt, providing more adaptable support for ongoing operations and funding requirements. The debt maturity date is not anticipated before the second half of 2027.
“Today’s announcement marks a crucial achievement in Star Entertainment Group’s transformation,” remarked Robbie Cook, CEO and Managing Director of Star Entertainment Group. “With an optimized capital structure, a fortified balance sheet, and enhanced flexibility, we possess a robust foundation to execute our transformation plans and strategic priorities.”
The share price of Star Entertainment Group has declined to A$2.
The Star Entertainment Group has unveiled its most recent financial report, exposing a $4 billion AUD deficit in the previous year. This follows the company’s declaration of a $2.4 billion AUD annual shortfall last month. The company attributed the financial shortcomings to depreciation charges on its Sydney, Gold Coast and Brisbane gaming establishments.
The annual report, encompassing the period concluding June 30, 2023, incorporated approximately $2.8 billion AUD in expenses categorized as “major undertakings.” This follows a string of fines and penalties in recent years.
These expenses include a $2.2 billion AUD non-cash depreciation of goodwill and real estate assets at the Treasury hotels in Sydney, Gold Coast and Brisbane. Moreover, there were $595 million AUD in regulatory and legal expenditures, $54 million AUD in debt restructuring expenses, and $16 million AUD in staff reduction costs.
Sign up for the iGaming news newsletter.