Star Entertainment Confirms the Execution of $130M Debt Facility

Australian gaming and hospitality giant The Star Entertainment Group unveiled a new debt facility amid a challenging period for the company and continued regulatory scrutiny.

The Debt Facility Will Help the Company Get Through the Struggles

In a filing to the Australian Securities Exchange (ASX), the company announced that it has executed a commitment letter for a new debt facility with its lenders. This move is in line with an earlier announcement The Star Entertainment Group made on September 25 this year.

The company confirmed that the debt facility comprises two tranches of AUD 100 million ($64.9 million), for a total of AUD 200 million ($129.8 million). The casino and hospitality operator noted that the company has the ability to draw down the first tranche until December 20, 2024.

In addition to that, the company also confirmed that its lenders have agreed to provide a covenant waiver for the next quarterly testing date, being December 31, 2024.

A Challenging Time for The Star Entertainment

As mentioned, this ASX announcement comes amid a challenging period for the company, whose suitability to hold a license in New South Wales is still in question. Regulatory scrutiny has prompted The Star Entertainment Group to introduce changes and a remediation plan but this path has proven to be bumpier than expected, resulting in continued financial struggles.

The company’s report for the first quarter of the fiscal year highlighted decreases across many metrics as revenue dropped by 18% to AUD 351 million. EBITDA, on the other hand, plummeted by 130% to a loss of AUD 18 million.

The company’s full-year results for the previous year weren’t much better as it reported a net loss of AUD 2.44 billion.

While the Star Entertainment Group’s share price experienced a recent spike, the company remains embroiled in struggles. However, its management is still committed to implementing the remediation plan, rebuilding trust with investors and regulators and returning to profitability.