Cash-starved Star Entertainment has no current plans to raise money from its shareholders on the same terms as offered to its corporate saviour, Bally's Corporation.
CEO Steve McCann said the gambling and resorts company’s focus was on obtaining shareholder approval for the crucial A$300 million (US$189 milion) strategic investment by the U.S. gaming giant.
Star will seek shareholder approval in June for its plans to issue Bally’s with convertible notes which convert into a 56.7% equity stake at eight cents per share.
This is a discount to the last sale price of 11.2 cents when Star shares resumed trading on the Australian Securities Exchange (ASX) on Wednesday, up 0.2 cents from with the close on 3 March when they were suspended pending the lodgement of accounts.
The company on Tuesday reported a loss after significant items of $302 million for the first half of the 2025 financial year, 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.
Star shares have lost 98% of their value over the last eight years due a combination of factors including regulatory inquiries and fines, financial losses, a liquidity crisis and a loss of investor confidence.
With just $98 million of cash on 11 April, the company is relying on the Bally’s investment, the sale of its 50% stake in the new Star Brisbane casino and resort and $60 million from other assets to stave off administration.
Asked if existing shareholders could buy shares at 8 cents each, McCann told an investor briefing: “We are not currently contemplating a broader share issue at this point in time prior to the vote.
“We need to get to the vote and obtain shareholder approval for the transaction to continue and for us to have the liquidity injection that we require, and we will consider whether or not it's appropriate to raise additional capital as part of that work.
“But our current focus is to get through everything we need to get to the vote. And for shareholders, we give them the opportunity to approve the transaction.”
“If they think that it's appropriate, we will be recommending the transaction in the absence of a superior proposal emerging between now and then.”