Star Entertainment Group

Star Entertainment Group has requested that a trading halt be applied to its ordinary shares as the group puts the finishing touches to capital restructure initiatives.

The halt, which has been granted by the Australian Securities Exchange, is expected to comprise a multi-million dollar equity raising scheme that AFR has placed at $750m.

“The securities of The Star Entertainment Group Limited will be placed in trading halt at the request of SGR, pending it releasing an announcement regarding the outcome of the institutional component of the accelerated entitlement offer,” an ASX update read.

“Unless ASX decides otherwise, the securities will remain in trading halt until the commencement of normal trading on Wednesday, 27 September 2023.”

This follows a turbulent period for the group, with numerous regulatory failings, as well as the ongoing Queen’s Wharf development in Brisbane, ending with the company reporting a significant A$2.43bn statutory net loss for the 12 months ending June 30, 2023.

A trading halt, Star noted, was necessary due to an upcoming announcement in connection with a refinancing and related capital structure initiatives. It was added that the group is not aware “of any other information available at this stage that is necessary to inform the market about the trading halt”.

In September 2021, the then Independent Liquor and Gaming Authority, now the NSW Independent Casino Commission, appointed Adam Bell SC to conduct a review of The Star.

The main goal was to assess its suitability to hold and be associated with a casino licence in the region, including compliance with its regulatory and legal obligations. 

In September 2022, an unsuitability verdict was issued, with “many governance, risk management and cultural failings” reported as being discovered, with Star also found to have treated the state regulator “with disdain” and having delivered “deceptive” communications in the past.

This was followed by a similar ruling some time later within the group’s home market of Queensland, with Star subsequently hit with a pair of A$100m penalty packages as well as a number of remediation orders. 

Further regulatory issues have seen the operator become subject of enforcement action from Australia’s financial watchdog AUSTRAC, and counting four class action lawsuits being levelled against the group.

Last month, Star revealed that it had swung to a huge A$2.43bn statutory net loss for the 12 months ending June 30, 2023, as the numerous challenges encountered across recent times continue to take their toll on the company.

This figure includes A$2.82bn of significant items that comprise a non-cash impairment of The Star Sydney, The Star Gold Coast and Treasury (A$2.17bn), debt restructuring costs (A$54m) and redundancy costs (A$16m).

Furthermore, A$593m in ongoing regulatory and legal costs includes NICC and OLGR fines, AUSTRAC civil proceedings, unpaid NSW casino duty and costs associated with ongoing regulatory reviews.