The Star Entertainment Group is poised to receive a financial lifeline from its lenders through a strategic five-point plan aimed at stabilizing the gaming group under new CEO Steve McCann, reported the Australian Financial Review.
After extensive negotiations, lenders have verbally committed to a two-part extension of Star’s loans, including an immediate AU$100 million ($67.5 million) injection to cover urgent expenses at the new Queens Wharf resort in Brisbane.
The second tranche, also approximately AU$100 million ($67.5 million), would be conditional upon Star raising additional capital. These funds are critical for the company to manage short-term costs and demonstrate its financial viability to the New South Wales casino regulator by the upcoming deadline.
The proposed plan, expected to be finalized soon, would enable McCann to implement his turnaround strategy without resorting to asset sales or new equity raises.
Key components of the plan include additional loans, duty relief in Queensland, cost reductions, asset write-downs, and the sale of non-core assets, such as the recently sold former Treasury casino in Brisbane – for AU$67.5 million ($45.6 million).
Overall, the financial package could total between AU$300 million ($202.7 million) and AU$350 million ($236.4 million).
As discussions continue, lenders seek formal security over Star’s Sydney property, expressing frustration over delays in securing collateral.
With shares suspended since August 29th, Star is under pressure from shareholders to improve its financial position and avoid further equity dilution.
The company is also racing against time to secure necessary approvals from the Queensland government ahead of the upcoming election and to fulfill regulatory requirements in New South Wales by September 27th.
