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Star Entertainment to raise $800m after $988m hit on Sydney casino

Updated:2024-03-21 15:08    Views:58

The company said it would raise the money at a share price of $1.20 or a 21% discount from its most recent trading price.

The stock transaction was a need to get covenant relief from lenders, to whom the Star owed $1.3bn as of 31 December.

The equity raise will decrease the Star's net debt from $1.1bn to $431m and gearing from 2.7 to 0.8 times.

The company also disclosed that it would take a $988m impairment charge on the Star Sydney, which has struggled financially since the Bell report and at a time when the NSW government is debating imposing significant tax increases on gaming tables and poker machines.

Robbie Cooke, CEO and Managing Director of Star, said: “If those tax hikes went ahead in their current form, it would cost Star about $100m a year, basically doubling its tax bill and forcing it to take drastic measures.

"It does put the business in a very difficult position, and it would require very significant changes to the business."

For the six months ending 31 December, Star reported a net profit after tax revenue of $44m on $1bn, excluding the $988m impairment.

The Star Gold Coast's income increased to $276m throughout the time,Casino games 30% more than in 2019–20. The Star Sydney's $541m income represented a 14% decrease from pre-Covid time.

Meanwhile, a 1,500-person ballroom, a sky deck, over 50 restaurants, bars and cafés, luxury shopping and 7.5 hectares of public space are all included in the $2.9bn Queen's Wharf Brisbane project, which is scheduled to open in December.

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