Robbie Cooke insists his fresh $750 million raising sets Star up for the future. But investors have heard it all before.
Robbie Cooke, chief executive of stricken casino giant Star Entertainment, sounds a little like a punter on a particularly bad losing streak – the $750 million equity raisingafter the deal was revealed a day earlier by Street Talk is absolutely, definitely, positively, the last time he’ll need to go cap in hand to investors.
“There is never an absolute right number, but I don’t believe it’s too high. I don’t believe it’s too low,” Cooke said back in February. “There is an element of conservatism in this definitely, but positions the business for the next three years.”Chanticleer struggles to think of another ASX 200 company that has been forced to undertake two major equity recapitalisations so close together, but that demonstrates how desperate Cooke is to buy some breathing space.
First, the equity raising and accompanying $450 million debt deal from Westpac and Barclays will allow Star to repay $668 million of existing debt, with its new loan not beginning to mature until the second half of calendar 2027. Third, it allows Star to pay for its contribution to developments already underway at its Brisbane and Gold Coast casinos.And finally, it gives Cooke a bit of spare cash for working capital, investment, higher compliance costs and increased NSW casino duties.The problem for Cooke is that he’s trying to pull off this turnaround against a difficult operational backdrop.
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