Embattled Australian gaming group The Star has again gone hat in hand to the governments of New South Wales and Queensland to request tax relief as it struggles to stay afloat amongst a cash crisis.
According to the Australian Financial Review, the company is attempting to fend off bankruptcy, seeking safe harbor for its board to protect directors in the case of the company becoming insolvent.
The Star’s Chief Executive confirmed to the publication that the board was being run under the safe harbor provisions – allowing them to find solutions without fear or prosecution.
However, the tax relief appeal is likely to be rejected, with authorities from both states previously noting they would not grant tax concessions to the gaming operator.
Official sources heard by the AFR indicated that both states are preparing contingency plans for the possibility of The Star falling into administration.
Pubs and clubs mogul Bruce Mathieson, who controls 9.6 percent of The Star last week indicated that he would not be providing any more funding to the operator until the nation’s financial watchdog (AUSTRAC) and The Star agree on a fine for legacy AML/CTF breaches. Some AU$150 million has been allocated by the company for the fine.
This compares to the just AU$79 million ($49 million) in cash that the gaming group actually has in hand, as of December 31st of last year.
And despite news that a mystery Macau-based investor is now the second-largest holder of The Star stock – with voting power totaling 6.52 percent as of this week, the company still has a long way to go to improve its financials.
According to the AFR, The Star is currently going through nearly AU$50 million ($31 million) in cash per month, meaning that funding should run out by February.
The Star has reportedly appointed FTI Consulting as its safe harbor advisor, with creditors now holding more sway on decisions – such as appeals to state governments.
The Star’s CEO indicated that, aside from its regulatory and remediation concerns, the introduction of carded play has had a significant impact on the company.
“The technology solutions we are delivering are complex and [have] not yet been implemented in the same way in any other jurisdiction,” stated the executive.
Negotiations with lenders continue over short-term funding, with McCann previously warning that “The Star remains in an extremely challenging position”.
