Star Entertainment's Future Secured, But Challenges Remain
Star Entertainment's future, which hung precariously for weeks, has been secured. The company, deemed unfit to hold a casino license by a second NSW inquiry, faced a dire financial situation. However, a rescue package has been assembled, including a $200 million loan from its banking syndicate.
Despite this lifeline, complications arose. Negotiations with the Queensland government for tax relief fell through after Premier Steven Miles expressed outrage over executive bonuses being paid amidst the company's financial struggles. He declared that no tax relief would be considered while such bonuses were in place.
Star Entertainment's financial woes stem from cost and time overruns at its new Brisbane casino precinct, Queens Wharf. The project, not yet completed, has incurred significant write-downs, along with smaller write-downs on its Gold Coast and Sydney operations.
The company's financial statements, released on Thursday, revealed a statutory full-year loss of $1.69 billion, heavily impacted by $1.7 billion in significant items. The lack of audited accounts and the ongoing construction of Queens Wharf with minimal revenue are expected to raise concerns among analysts.
Shares, suspended for a month, will resume trading on Friday morning and are likely to face significant pressure.
The NSW Casino Commission has given Star Entertainment until Friday to demonstrate its financial stability. The company's response and the commission's assessment will determine its future. While the immediate crisis has been averted, Star Entertainment still faces significant challenges in the coming months.