Star Entertainment Group has entered a trading halt on the Australian Securities Exchange (ASX) after failing to release its half-year financial results by the mandated deadline.
The company said the delay is due to ongoing efforts to secure financial support.
Star Entertainment reportedly burns through $50 million monthly, with cash reserves of just $79 million.
So how does a casino go broke?
Analysts warn that without immediate intervention, the company could face administration by the end of February.
In response to the financial challenges, Star Entertainment’s board is convening a crisis meeting to explore potential funding options, including a proposed $650 million aid package from Oaktree Capital.
The company is also considering the sale of its stake in Brisbane’s Queen’s Wharf development to Hong Kong-based partners.
“It is likely that the 1HFY25 Report will only be able to be finalised if the company has received liquidity proposals which, after appropriate consideration by the Directors, are sufficiently capable of being progressed to finalisation in the context of determining whether the Company can continue as a going concern,” Star Entertainment said.
In the 2022-23 financial year, Star Entertainment reported a loss of $2.44 billion, followed by a $1.69 billion loss in the 2023-24 financial year.
These losses have been attributed to factors such as the COVID-19 pandemic, which led to staff layoffs and operational shutdowns.
The current situation has raised concerns about the potential impact on employment and tourism in the regions where Star Entertainment operates, including Sydney, Brisbane, and the Gold Coast.
Approximately 9,000 jobs are at risk across these properties.
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