The proposed transaction could bring in approximately AU$50 million ($31.5 million) for the financially struggling casino operator, though it would do little to resolve its broader financial challenges
Star Entertainment Group is struggling with a serious financial problem, and rumors say it might have enough cash to last a week.
Queensland Coal Tycoon Offers Star Entertainment AU$200M Lifeline
Chris Wallin, a coal tycoon from Queensland, has offered Star Entertainment AU$200 million ($126 million) to help out for now, reported The Australian. This quick cash boost should keep Star Entertainment going long enough to sell its stake in the Queen’s Wharf project in Brisbane. The buyers would be its partners from Hong Kong, Far East Consortium and Chow Tai Fook.
The potential deal could generate around AU$50 million ($31.5 million) for the cash-strapped casino company, but this would not solve its bigger financial troubles. Star Entertainment must pay AU$430 million ($271 million) to a group of lenders, covering half of the AU$1.6 billion ($1 billion) debt linked to the Queen’s Wharf project. The step-by-step launch of the AU$3.6 billion ($2.3 billion) venture has faced major setbacks and cost overruns, adding to its financial strain.
Inside sources claim Wallin’s bid aims to give Star Entertainment more time to work out a larger debt fix. The firm has already sold off some properties, including the Treasury casino in Brisbane and a Sydney event venue, in a last-ditch effort to steady its finances.
Regulators and Lenders Tighten Grip on Star Entertainment Amid Deepening Crisis
Star Entertainment’s efforts to get long-term funding have hit a snag. Lenders do not want to accept Oaktree Capital’s AU$650 million ($410 million) plan to save the company. This plan would use AU$200 million ($126 million) to pay off debt and the rest to cover day-to-day costs. Financial experts say if Star cannot find a way out of this mess, its shares might never start trading again.
Star’s problems do not stop there. It might have to pay up to AU$300 million ($189 million) in fines because of a legal fight with Austrac, the financial watchdog. Austrac thinks Star might have helped criminals launder money. On top of that, ASIC, another regulator, is still going after former Star bosses for not following the rules.
Even though Star might sell its stake in Queen’s Wharf, nobody knows who will run the casino there. Star has not asked the Queensland government about changing hands yet. Premier David Crisafulli says the state will not bail the company out, but he wants to make sure the thousands of people working there keep their jobs.
Star has over 8,000 employees in Queensland and New South Wales. Industry experts think that if the Queen’s Wharf sale happens, Star might sell off its other assets, too, such as its properties on the Gold Coast and in Sydney. Word is that Crown’s big investor Blackstone and hotel boss Bruce Mathieson might want to buy Star’s assets.
As the crisis gets worse, Star’s leaders face growing pressure. People criticize CEO Steve McCann and his team saying they did not act fast enough to stop the current mess. Regulators are taking a closer look, and lenders are becoming more cautious. This puts the future of one of Australia’s biggest casino companies at risk.
