Star Entertainment to delay interim results, enter trading halt: reports
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The news: The Star Entertainment Group is set to delay its half-yearly results due Friday and enter a trading halt, after the board was unable to sign off on accounts that say the company was a going concern, according to sources cited by The Australian and AFR.
The numbers: In January, Star posted Q2 revenue of $299 million, down 15% compared to the previous quarter. It also reported a quarterly EBITDA loss of $8 million, an improvement on its EBITDA loss of $18 million in the first quarter.
Star drew down a $100 million tranche of a new loan facility in early December, and was struggling to fulfil conditions necessary to draw down a second $100 million tranche. In particular, the group said its capacity to raise $150 million of subordinated debt was "limited in the short term in the absence of additional liquidity solutions".
The context: The Group has been under extreme financial pressure as it manages ongoing regulatory probes and a collapse in revenue.
The failure to sign off on financial statements, for the second time in six months, suggest that CEO Steve McCann and his bankers have not been successful in raising short-term funding required to meet near-term payments, including payroll and interest payments. Per ASX listing rules, Star must publish its half-yearly results by close of business on Friday, or risk being suspended from trading.
Earlier in February, Star received a debt financing proposal from funds associated with US asset manager Oaktree Capital Management, including a commitment letter and term sheet for $650 million across two debt facilities. Star said that the board would consider the proposal, and should it proceed, the company will need additional funding for the period prior to the proposal being implemented.
The troubled casino operator is continuing to explore possible liquidity solutions, as announced in January, warning that there remains "material uncertainty as to the group's ability to continue as a going concern".
The sources: The Australian, AFR, Capital Brief
