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Star Entertainment shares tumble 9% after Queen's Wharf deal terminated

Star, which operates casinos in Brisbane, the Gold Coast and Sydney, entered a trading halt before the Australian share market opened on Friday after failing to post its half-year financial results. Australia’s embattled Star Entertainment Group was suspended from the ASX, the country’s stock exchange, on Monday for failing to file its financial results. Equity analysts are not so confident, with Morningstar analyst Angus Hewitt, in a note to investors, saying that at its current cash burn, the company would be lucky to make it to its interim results scheduled for February 28. "We now incorporate a 50 per cent probability that Star falls into administration, and equity holders are wiped out," Hewitt said. Significant regulatory and financial challenges are clouding the company's future. So there's no doubt that investors are wondering what the Star Casino share price is actually worth.
The Queen's Wharf joint venture development in Brisbane commands $2.6 billion of the spending with a 99-year lease and 25-year exclusivity period. Morningstar expects the extensive capital investment in Queensland to weigh on the near-term returns on invested capital. Further, we also believe the capital committed to facilities in Queensland might be disproportionate to the size of the addressable market. The company was forced to suspend its shares from trading on the ASX for weeks while it reviewed the report – which called its integrity to hold a casino license into question – and its implications for company financials.
US casino operator Bally’s has reportedly shown interest, as has billionaire Clive Palmer. With the company’s future under a cloud, its board is holding out hope of a last-minute rescue, saying on Friday that it expected to receive "possible liquidity solutions" during the day, which would be carefully assessed. Star Entertainment has given its suitor Salter Brothers until the beginning of April to complete due diligence and deliver a $750 million rescue package, as the casino group teeters on the brink of collapse for the second time in a month. The ASX-listed company was hit with a 41 per cent protest vote against its remuneration report as it revealed an unaudited earnings before interest and tax loss of $27 million for the first four months of trading in the new financial year. The casino operator burnt through $107 million of its available cash in the December quarter, which should be its busiest trading period of the year. Meanwhile, Star Sydney login process’s largest shareholder and legendary hotelier Bruce Mathieson had also previously pitched two offers for the company’s Gold Coast melbourne casino terms of service.
Membership fees for the quarter hit $US1.19 billion, up from $US1.11 billion in the second quarter of 2024, with the company reporting 78.4 million paid memberships and 140.6 million total cardholders. The retail giant's second-quarter revenue increased to $US63.72 billion, from $US58.44 billion during the same quarter in fiscal 2024. "The tariffs are very fluid right now. So it's hard to really give any predictions on what we can do, but we are prepared, our people are very well equipped to lower prices and defer any cost increase that come our way." "Sometimes the margins are much tighter in those categories, but they [buyers] are prepared to work closely with the suppliers and see how efficient we can bring goods to market - is there anything we can mitigate in those categories. The Insurance Council also often puts out detailed reports on the economic impacts of natural disasters.
The company told shareholders on Friday that it would halt trading and publish its full-year results later in the day. That’s while it "considered the implications" of a damning report by New South Wales (NSW) regulators that found it was still unsuitable to hold a gaming license for its flagship Star Sydney property. Star is preparing to announce a $1.4bn write-down of its online casino guide assets and a major cost-cutting programme, the Australian Financial Review reported on Monday.
Exchange operator ASX automatically suspended shares in Star on Monday morning after the casino operator missed Friday's deadline for issuing its earnings update for the first half of the financial year. There remains a large amount of uncertainty surrounding the future of Star’s earnings recovery. The pending AUSTRAC fine, eventual outcome of its Aussie casino platform providers license and a probable capital raise in the coming months all weigh heavy on its future performance. The collapse in earnings since fiscal 2024 has indicated Star might not have sufficient liquidity to stay afloat amidst near-term earnings headwinds, the AUSTRAC fine and equity contributions to redevelopment. With a $200 million emergency debt facility at a rate of 13.5%, it appears Star may be buying time ahead of a potentially value-dilutive equity raise in fiscal 2025. Queensland is currently the only state where Star holds an exclusive position and consequently the company is throwing substantial amounts of capital (~$3 billion) in ensuring it stays that way.
However, the proposal was laced with conditions, including the approval of NSW and Queensland governments and regulators, and a satisfactory settlement with existing lenders. The success of any deal is dependent on its lenders, who need to agree to any asset sale or refinance of their debt which is paying interest of more than 13 per cent. Star subsequently lied to CUP and the National Australia Bank in an effort to conceal the deceit.
Star has been in talks with the owners of the other half of Brisbane's Queen's Wharf development — Hong Kong investors Far East Consortium International and Chow Tai Fook Enterprises — since mid-February. Embattled casino group Star Gold Coast casino player score Entertainment will stay alive, for now, after securing a $53 million lifeline in return for selling its 50 per cent stake in the new Brisbane Aussie casino top payment methods. The ASX 200 and the All Ordinaries index both ended Monday's session 1.8 per cent lower, wiping off about $50 billion in market value. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.