The last time the casino group published accounts, it was fresh off the second of two equity raisings and flush with cash. Yet attention is back on its financial strength.
Already a subscriber?Steve McCann knew The Star Entertainment Group had plenty of urgent problems, but the one he didn’t expect was cash.
That’s why Star spent the weekend in talks with his three stakeholder groups – investors, lenders and governments/regulators – about a capital injection. It is a shocking place to be.Debt alone won’t fix the problem – the ink has barely dried on Star’s existing debt package – whileand are not hungry for more shares at rock-bottom prices.
It is McCann’s biggest test at Star to date. The CEO has pitched his longer-term plan to governments and regulators and some shareholders. But it is only as good as his ability to retain Star’s licences and keep the company afloat. McCann doesn’t have the luxury of waiting to see whether Star can trade its way out of its mess; theThe first is soft trading activities in its casinos. Takings are down thanks to regulatory restrictions and the wider economic slowdown, as Star flagged in June.
McCann knew going in, although he may not have appreciated just how important it was to think about Star’s near-term funding needs.
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