The Star Entertainment Group, required by the Australian government to suspend its operations since March 23, has provided an update of its activities, including an estimate of its cash burn during the enforced shutdown.
In a statement to the Australian Stock Exchange on Thursday, Star offered the estimate that a three-month shutdown until June 30 would carry a cash requirement of A$220 million (US$140 million), and that a six-month shutdown until September 30 would cost the firm A$320 million.
In response, Star has executed additional debt funding from its existing relationship banks for A$200 million.
Managing Director and Chief Executive Officer Matt Bekier stated, “The Star is implementing necessary and wide-ranging measures to strengthen the balance sheet and preserve liquidity in the current exceptional circumstances. The shutdown continues to have a significant impact on our people and their families, and the group welcomes the Australian government’s support, particularly the JobKeeper Payment program. Our focus remains on preserving the group’s solid financial position and operating flexibility to resume operations quickly when the current Covid-19 restrictions begin to lift.”
Star also noted that it had “completed staffing requirements” for the period of the shutdown, a process that resulted in about 8,500 staff being stood down, including the termination of contractors and casual workers.
Chairman John O’Neill observed, “These unprecedented challenges have had a considerable human impact. To temporarily stand down more than 90 percent of our dedicated workforce will be the most painful decision our senior management is ever likely to encounter.”