A Macau-based businessman has become a substantial shareholder in Star Entertainment, the Australian casino and resorts group which is facing imminent collapse.
Star Entertainment told the Australian Securities Exchange (ASX) that Wang Xingchun held a 5.52% stake after buying 158.27 million shares for about $30 million since 27 September 2024.
The Chinese-born businessman, who also holds Belgian citizenship, paid between 11.05 cents and 25.9 cents per share to build his stake, which had to be disclosed once it passed the 5% level making him a substantial shareholder.
The holding was revealed as Star (ASX: SGR) shares bounced off a record low of 10 cents last Friday to close on Monday at 12 cents, up two cents (13.64%) on the day, having plunged 98% since 2018.
It also came amid media reports that the company, which owns casinos in Sydney, Brisbane and the Gold Coast and had been plagued by money-laundering allegations, had failed in attempts to raise money through asset sales to stay afloat as dwindling cash looks likely to run out within weeks.
The Australian reported a deal for Star to divest the old Treasury Hotel building and nearby car park in Brisbane failed to proceed in December, only months after it sold the Treasury Casino building to Griffith University for $67.5 million.
Morgans Financial Associate Analyst Leo Partridge said Star was likely to run out of money and go into administration by early to mid-February unless it raised funds through asset sales or a share issue.
He said although it could raise up to $300 million over the next 12 months through the divestment of assets like the Darling hotel, which adjoins the Star Sydney casino, this was not likely and it did not have that long to wait.
If the company could not reach agreement with the NSW and Queensland Governments for a reprieve on more than $400 million a year in tax payments, the company could not draw down the second $100 million tranche of a debt facility to avoid going under.
“If they can’t come to an agreement with the governments to meet their short term requirements, they would have to do a diluted (equity) raising to stay afloat,” said Partridge, who has a Reduce recommendation on the stock.
Partridge noted Star also had to come up with its $800 million share of a debt repayment associated with its new $3.6 billion Brisbane casino complex in December, an asset some have suggested could also be sold.
Star burnt through $107 million of cash in the last three months of 2024, leaving it with just $79 million at 31 December, including $100 million drawn down on the facility.
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