The Star Entertainment Group Limited Stock SGR
Xingchun Wang has spent more than $38 million buying shares in Star, which last week warned it was running out of money and could be weeks away from collapse if it did not secure additional financing. The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Now the chances of losing it all have been turned back onto one of Australia’s biggest casino operators. “Traditionally, probity checks have taken many months for new operators in casinos across the different state jurisdictions,” Mr Jones said. Swinburne University law and corporate governance specialist Helen Bird told ABC’s News Channel it seemed “more than likely” the company would tip into voluntary administration.
In the absence of one or more of those arrangements, there remains material uncertainty as to the Group’s ability to continue as a going concern,” Star said. Star Entertainment will sell its stake in the new Queen’s Wharf casino and entertainment complex in Brisbane, a deal that will give the company enough cash to stave off collapse for several months. Strict new gambling rules and fewer tourists at the allslots casino free poker tournaments operator’s flagship Sydney establishment have pushed the company into a loss for the past three months. The largest shareholder of the pubs and bottle shop giant said it wants more say in the company’s strategy ahead of new CEO Jayne Hrdlicka’s arrival. The Star Entertainment Group Limited is currently rated five stars by our Analyst Rating and trades at 0.4 of its price to fair value on a $0.27 share price (as at 1st October 2024). On the other hand, Star continues to face potential operational risk at its Queensland facilities. This stems from material uncertainty around the considerable Australian Transaction Reports and Analysis Centre (“AUSTRAC”) fine after alleged non-compliance with Australia’s anti-money laundering and counter-terrorism financing laws.
The fact that it hasn’t suggests the board and its advisers are engaged in the same hunting expedition as everyone else – attempting to dig out details on this new mysterious investor who is now Star’s second-largest shareholder. In an update posted to the ASX on Monday night, Star has confirmed it has agreed to a $300 million rescue package with American casino live dealer and gaming group, Bally’s. Star — which owns casinos in Brisbane, the Gold Coast and Sydney and employs more than 9,000 people — has warned for months it could fall into administration if a financier was not found.
While Star has pointed to an unnamed party as key to its survival, it has not provided any details as it continues to negotiate a deal. The Australian casino ratings Financial Review can reveal that this prospective financier is Salter Brothers, led by wealthy businessmen Paul and Robert Salter and backed by offshore funds. “I would note that the regulatory environment and challenges [of] technology upgrades and other matters we’re dealing with in Australia are quite unique to the Australian casino regulations market. The NSW and Queensland governments have shown little interest in bailing out the company, and on Friday they pointed to the impact of Star’s precarious situation on jobs.
He said he would not like to see the company go into liquidation “for the people’s sake”. “To me, it has been a disaster dealing with the management of Star and I think … there is no doubt the board should be blamed for how bad it is,” he told ABC Radio Brisbane. “What we would want to see is the government work to make that process as quick as possible, while still ensuring that any new operator is compliant with the regulations and the legislation.” He said the government would also need to move quickly to approve a new operator should there be a sale. Mr Jones said in the event Star did go into administration the union would want the state governments to work quickly with the administrator and existing lenders to ensure the administration was funded and the doors stayed open.
The company’s chief executive, Steve McCann, needs to secure long-term financing from an unnamed party for the accounts to be signed off and for trade to resume. A deadline for the blow-up of a deal with the BlackCoin casino login operator’s Hong Kong investors is approaching. Yesterday, there were media reports that Star was “on the brink” of inking a deal with its joint venture partners Chow Tai Fook and Far East Consortium, to buy its 50 per cent interest in the development. The falls this week have been driven by several factors, free slot machine games including US trade policy uncertainty at a time when fears of a looming US recession are rising. Locally, the falls have been exacerbated by more weakness in the big banks and worsened after BHP, RIO, South32, and energy giant Woodside all traded ex-dividend. “The horrific price action in the ASX200 has continued today, slipping below 8,000 for the first time in almost six months. Canstar analysis of RBA credit card statistics and in-house survey data shows that of those with credit card debt, the average amount owing is estimated to be $4,420.
Against all odds, Star Entertainment has managed to avoid sliding into administration for now. But its near demise poses bigger problems for a glittering world that risks being consigned to a bygone era. Hong Kong investors Chow Tai Fook Enterprises and Far East Consortium, which each own 25 per cent of the Brisbane complex, had agreed to buy Star’s 50 per cent stake for $53 million. In September last year, Star’s directors started getting advice on “safe harbour” provisions provided by the Corporations Act that would protect them from being personally liable for debts in the event that it cannot stay solvent.
For a sharemarket gambler, an investment in Star is the ultimate high-adrenaline bet. And make no mistake – this is a big bet from an investor – even one who is located at the epicentre of gambling and who thrives on risk. He has been stalking Star since September last year but only showed his hand this week when his stake tipped over the 5 per cent notification threshold.