Star Entertainment has warned it may not survive unless it receives a $300 million strategic investment from American gaming giant Bally's Corporation and completes the sale of its stake in the new Star Brisbane casino and resort.
Desperately clinging to life since revealing a cash flow crisis in January, the Australian gambling and entertainment company published its delayed half-year results on Tuesday but its shares remained suspended.
“There remains material uncertainty regarding the Group’s ability to continue as a going concern,” Star Entertainment said in an ASX announcement.
Revealing it had just A$98 million (US$61.7 million) of cash on 11 April, Star said key initiatives in the near term which were critical to its liquidity outlook included:
- Bally's completed a $300 million strategic investment, consisting of $100 million received on 9 April and $200 million which is subject to shareholder approval at a meeting in June 2024
- Securing access to $60 million raised from the sale of The Star Sydney Event Centre and associated spaces, and
- The sale of its 50% stake in Star Brisbane to its joint venture partners Chow Tai Fook Enterprises and Far East Consortium International, which it hopes to complete by the end of June 2025.
The company also revealed that revenue in the six months to 31 December was 25% lower than the prior corresponding period at $650 million due to challenging trading conditions including casino operating reforms like mandatory carded play and cash limits at The Star Sydney and further loss of market share.
It reported a statutory net loss after significant items of $302 million, compared with a $9 million profit a year earlier, and a normalised loss after tax but before significant items of $136 million, compared with a $13 million loss.
But it had achieved the previously announced $100 million reduction in annualised cost savings, which it was working to embed, and it was looking for more costs to cut.
“The Star continues to be impacted by an uneven competitive environment with pubs and clubs, which continues to negatively impact on operating performance,” the company said.
When the shares last traded on 3 March, they closed at 11 cents, capitalising the company at $315.5 million, which means they have lost 98% of their value over the last eight years.
