Just when it looked like the corporate cards could not be further stacked against it, Star Entertainment has been dealt another losing hand.
The casino and entertainment company is on the brink of going bust after revealing a key refinancing deal collapsed and it remains in danger of running out of cash.
Star said an A$940 million (US$592 million) offer that could provide it with sufficient liquidity to refinance all of its debt had now been withdrawn by alternative asset manager Salter Brothers Capital.
The company said after extensive engagement with Salter Brothers and third parties including State governments and regulators, it became apparent a number of conditions precedent could not be satisfied to address its liquidity needs.
In particular, lender requirements for specific priority arrangements and enforcement rights in relation to their proposed security over non-gaming assets could not be met.
Star said it could not lodge its half-year report without an appropriate refinancing solution. It continued to explore liquidity solutions including a $250 million capital injection from American gaming giant Bally's Corporation.
“However, there remains material uncertainty as to the Group's ability to continue as a going concern,” Star said.
Star has agreed to sell 50% of the new Star Brisbane casino and resort to its joint venture partners Chow Tai Fook Enterprises and Far East Consortium International and signed a $250 million bridge facility but needs to refinance its senior debt.
The refinancing deal with Salter Brothers was a crucial piece of the corporate rescue puzzle. The Bally's offer a reassuring alternative if the deal falls through.
The company’s shares remain suspended from trading because its directors have not approved its accounts due to concerns it may be unable to meet its liabilities.
The shares last traded on the ASX at 11 cents, capitalising it at $315 million, compared with a record high of $5.38 in August 2016.
