Star Entertainment shares plunge after cash warning
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More news: Shares in Star Entertainment Group have slumped 23% to 15 cents in early trading after the troubled casino operator warned late on Wednesday that it only had $79 million in available cash at December-end.
This is amid continuing difficult trading conditions and as it struggles to fulfil conditions necessary to draw down a second $100 million tranche from a new loan facility. Star shares have lost more than two-thirds of its value over the past 12 months.
Star Entertainment flags challenging cash position
The news: Embattled casino operator Star Entertainment Group has warned of a challenging cash position amid continuing difficult trading conditions.
The numbers: Star said it had $79 million in available cash left on 31 December 2024. Total spending over the December quarter was $107 million, the company said in a statement late on Wednesday.
Star shares, which have lost nearly two-thirds of their value over the past 12 months, closed at 20 cents each ahead of the announcement.
The context: Star said the available cash balance reflected essential capital expenditure, significant items including upfront fees relating to the establishment of a new loan, payment of the first instalment of a $15 million fine imposed by NSW gaming regulators and ongoing transformation and remediation activities. In November, the group had flagged continued deterioration in trading performance with losses incurred at group earnings level.
Star drew down a $100 million tranche of a new loan facility in early December, but says it is struggling to fulfil conditions necessary to draw down a second $100 million tranche given its current situation. It is also exploring other options.
The casino operator’s precarious finances following hefty penalties and suspension of its licence to independently operate the flagship Sydney casino due to compliance breaches. Star earlier reported a slide in first-quarter earnings, and will detail half-year results on 28 February.
The source: ASX announcement
