A Pleasant Surprise Amid Challenges
Star Entertainment’s CEO, Steve McCann, continues to urge the governments of New South Wales and Queensland to provide tax rebates, underscoring the gaming group’s efforts to restructure operations and protect those in leadership.
“Our ask from the government hasn’t changed. We are making good progress with our remediation plans; we’re looking at all options through our business restructure to retain the vast majority of frontline jobs. We need time to reset the business,” McCann stated.
Meanwhile, the Star has received a significant investment during this turbulent period from Macau businessman Xingchun Wang, who has increased his stake in the conglomerate. Wang recently purchased 28 million Star shares, making him a major investor with 6.52% ownership. This development boosted the company’s share price by 27%, but it still lags far behind its 2018 peak of over $5 per share.
Remediation Efforts
Star’s financial turmoil is primarily fueled by regulatory scrutiny and penalties due to anti-money laundering (AML) and counter-terrorism failures. Bruce Mathieson, the Pubs and Clubs mogul with a 9.6% stake in the company, indicated he would not offer the operator more funding until AUSTRAC (Australian Transaction Reports and Analysis Center) and the gaming group agree to a fine its AML/CTF shortcomings. The company has set aside AU$150 million for the penalty.
Star has also enlisted FTI consulting to guide it through creditor relations and lender requirements compliance. Under the safe harbor provisions, the group’s directors trade control of corporate decision-making to creditors for protection from litigation and liability.
An Uncertain Future
With cash reserves depleting and no sign of relief soon, Star’s future hangs in the balance. The company is still negotiating with lenders to secure short-term funding, but McCann warns, "The Star remains in an extremely challenging position.”
