Star Entertainment is facing a potential collapse after a crucial $940 million funding agreement with local investment managers Salter Brothers failed to materialise. The company disclosed that negotiations for a refinancing plan broke down as they could not meet the necessary conditions in time to avert financial disaster.
In a statement to the ASX, Star Entertainment confirmed that despite their earnest efforts to partner with Salter Brothers Capital for refinancing, they did not receive a binding debt commitment letter, leading to the withdrawal of the proposal. The casino operator indicated that their engagement with Salter Brothers, as well as discussions with state governments and regulatory authorities, indicated that several prerequisites for refinancing were unlikely to be fulfilled within the required timeframe.
Despite this setback, Star Entertainment is actively seeking alternative liquidity solutions to strengthen its financial standing. This includes ongoing discussions with Bally’s Corporation, in connection with a proposal received earlier this year.
However, the company admits there is significant uncertainty regarding its ability to continue operating as a going concern. Currently, its shares remain in a trading halt, valued at only 11 cents, a stark decline from over $5 in 2018. The gaming giant, which employs around 9,000 staff across its casinos located in Sydney, Brisbane, and the Gold Coast, is under immense pressure as it navigates these financial challenges.