Star Entertainment Shares Dive Amid Financial Turmoil and Search for Lifeline

BRISBANE, Australia — Shares in Star Entertainment, the struggling casino giant operating venues in Brisbane, the Gold Coast, and Sydney, fell by over 15 percent following a trading halt on Friday amid concerns of a looming financial collapse. The drop came as the company seeks a financial lifeline to stabilize its precarious situation.

Star Entertainment was required to release its half-year financial results before trading resumed on the Australian Securities Exchange (ASX) at 10 a.m. AEDT on Friday. However, after failing to meet this obligation, a trading halt was initiated just minutes before the market opened. At 9:54 a.m., the ASX announced a “temporary pause” in trading, indicating that further announcements were pending.

In an update released shortly after the halt, Star Entertainment revealed that it was expecting to receive “one or more liquidity proposals during the course of today.” The statement underscored the critical nature of these proposals, noting that the half-year financial report could only be finalized if the company secured funding solutions capable of addressing its liquidity concerns.

“If [the half-yearly report] is not lodged later today as required by ASX listing rules, then the company shares will be automatically suspended from trading from Monday, 3 March 2025,” the statement added, amplifying concerns about the company’s viability.

When trading resumed before noon, Star Entertainment’s share price plummeted to just 11 cents, marking a staggering decline of more than 15 percent by the market close.

Compounding Star’s difficulties, reports from the Australian Financial Review highlighted internal struggles within the company’s board concerning the approval of financial statements. The company has been beset by a series of operational challenges, with a reported cash balance of only $79 million as of January.

“If they don’t get a lifeline, ultimately they will have to enter some sort of voluntary administration process,” said Omkar Joshi, an analyst with Opal Capital Management. He warned that such an administration could lead to asset sales and further disruptions within the company.

Joshi further criticized Star’s management, describing the situation as a “slow train wreck” that has worsened over several years due to poor decision-making. “They can’t really raise new equity funds, and they’re also struggling to raise new debt funds, causing a liquidity problem,” he said.

The repercussions of Star’s financial struggles extend beyond the boardroom, affecting approximately 9,000 employees across its three venues. Andrew Jones from the United Workers Union expressed concerns over potential layoffs if the company enters administration.

“One, the administrator closes the doors and effectively, our members are out of work. Or, alternatively, the administrator continues to operate the casino while seeking to have someone else purchase it,” Jones explained. The ongoing uncertainty has created a palpable sense of anxiety among employees, he added.

Queensland Premier David Crisafulli emphasized the government’s commitment to protecting jobs, stating, “Our non-negotiable is around the people who work there.”

Meanwhile, NSW Minister Penny Sharpe noted the state government’s watchful eye on developments at Star. “Star has to maintain itself as a viable casino, that’s something they have to do,” she said. The NSW government previously attempted to work with Star on a rescue package.

The challenging environment for Star Entertainment is further complicated by ongoing investigations. The corporate watchdog, ASIC, alleges that the company’s leadership failed to address critical money laundering risks at its casinos between 2017 and 2019, leading to serious breaches of the Corporations Act.

While analysts suggest a nearly 50 percent chance of collapse, Bruce Mathieson, a billionaire hotelier with a 9 percent stake in Star, has advocated for a management overhaul to salvage the company. “I wouldn’t like it to go into liquidation… I’m pretty sure there are plenty of deals around that can be done to stop it from doing that,” Mathieson stated.

As Friday’s trading progressed, analysts remained skeptical about Star’s ability to recover. Morningstar analyst Angus Hewitt remarked, “We think it is pretty unlikely Star is going to be able to trade itself out of this predicament.”

At the close of trade on Thursday, Star’s share price reflected a market capitalization of approximately $373 million, underscoring the severity of its financial plight.