The chances of the casino group, Star Entertainment (ASX:SGR), surviving in its current state look increasingly bleak as the company struggles to gain support for a survival plan.
The company’s shares remain suspended due to its failure to lodge the June 30 accounts on time after it requested an extension from the due date, last Friday to Monday of this week.
There has been no statement from the company, and media reports of its struggles to resolve its problems only started emerging late Wednesday, indicating that negotiations are becoming fraught.
Media reports say Star’s banks are pushing back against the casino operator’s pleas for more short-term debt and want any new debt to be matched by government concessions and increased security over assets, including properties.
The reports also state that the secured lenders are owed $450 million, compared to the company’s market value of $1.29 billion at the last sale of 45 cents a week ago—a price that is no longer realistic.
Additionally, the lenders were reportedly shocked to learn of new cost blowouts at Star’s Queen’s Wharf Brisbane casino, which has reportedly cost double the initial estimate of around $2 billion. Queen’s Wharf began opening in August, well behind schedule.
It is said to need several hundred million dollars to cover start-up costs and early losses.
Queensland Premier Steven Miles confirmed that tax deferral options are being considered to help the operator maintain its operations.
“Star will be required to pay all of its taxes, all of its licence fees,” he said, but noted that a tax deferral for payroll and gambling taxes is one of the options being considered.
The situation is further complicated by legal actions related to one of Star’s partners in the Queen’s Wharf development, Chow Tai Fook Enterprises of Hong Kong.
The Queensland Government has faced accusations of supporting the company’s efforts to prevent the release of a probity report into its suitability to operate the casino. This has raised concerns about transparency, with opposition leaders calling for greater accountability.
The Hong Kong company, with the support of the Queensland Government, has twice this year sought suppression orders from courts to prevent reports on the relationship between the company and a gambling junket operator.
