The Star Entertainment to Receive $100M from Lenders

The Star Entertainment Group is set to receive more backing from its lenders amid the financial trouble it faces. The Australian casino and hospitality giant has been offered AUD 150 million to deal with the issues and stabilize its business.

The Star Entertainment Is Struggling Financially

The lenders proposed providing AUD 150 million ($100 million) to The Star Entertainment, adding to its existing AUD 350 million senior debt facility. The potential backers include Oaktree Capital and Cerberus Capital Management, which continue to negotiate the terms of the deal. Macquarie and Deutsche Bank, on the other hand, have requested increased scrutiny of the casino company’s properties.

The lease remains subject to regulatory approvals.

For context, The Star Entertainment recently opened its new casino in Brisbane and shut down Treasury Brisbane. However, its new property, Queens Wharf Brisbane, is yet to gain the traction expected by the company and generate sufficient profitability.

Not to mention, the company continues to deal with ongoing regulatory issues in New South Wales and the aftermath of its suspension from the Australian Securities Exchange (ASX).

In the meantime, The Star Entertainment leadership continues to negotiate with the governments of New South Wales and Queensland, as well as the financial crimes regulator in hopes of stabilizing its finances. The casino company hopes to strike a deal within the next few days.

The Star Faces Regulatory Scrutiny

As mentioned, The Star Entertainment continues to face regulatory scrutiny in New South Wales. The company was recently deemed unfit to hold a license, once again, adding to its woes.

A few years ago, regulators uncovered multiple regulatory violations and forced the casino operator to implement a remediation plan. A special manager was appointed to oversee the corporate changes. Unfortunately, the process has proven more difficult than initially expected, with The Star still struggling to adapt to the regulators’ expectations.

While the authorities have demonstrated patience time and time again, The Star’s continued failures have sparked concerns about the future of the company.

In what can be considered a silver lining, the Supreme Court in Brisbane just ordered high roller Yew Choy Wong to pay back some AUD 38 million to Star Entertainment Queensland. If this money is returned, it will provide the company with at least some backing amid an intensely turbulent period.