Australian Star Entertainment Group has reiterated that there is significant uncertainty surrounding its ability to continue as a going concern, with the company saying its options for raising much-needed liquidity are “limited”.
Back in late 2024, it emerged that Star Entertainment Group had burned through most of the A$100 million credit facility it had drawn down in December, leaving just A$79 million available as of December 31. At that time, Star filed its quarterly performance report with the ASX, which confirmed that the company was not facilitating access to any additional funding as it sought to avert liquidation.
“The Group continues to work towards the fulfillment of conditions precedent that must be met in order to draw down the additional AU$100 million under Tranche 2 of the New Facility,” it said. “A number of these conditions remain challenging to meet given the Group’s current circumstances. In particular, the Group’s capacity to raise AU$150 million of subordinated debt is limited in the short term in the absence of additional liquidity solutions.
“In addition to seeking to fulfill the conditions precedent for Tranche 2 of the New Facility, the Group continues to also explore other possible liquidity solutions.”
The company confirmed recent reports regarding the invocation of safe harbour provisions designed to protect directors from personal liability in the event of a proposed restructuring failure.
However, analysts believe the company could cease to exist before the announcement of its 1H25 results at the end of February.
“As noted above, the Group continues to explore other possible liquidity solutions,” Star said. “While discussions continue with respect to a range of different solutions, there is no certainty that any of these negotiations will result in one or more definitive arrangements that might materially increase the Group’s liquidity position.
“In the absence of one or more of those arrangements, there remains material uncertainty as to the Group’s ability to continue as a going concern.”
The tough situation comes despite Star reporting an EBITDA loss of A$8 million in December 2024, compared to a loss of A$18 million in September. However, revenue was up 15% sequentially to A$299 million.
“The results for the period reflect continued weakness in the operating performance of the Group due to the ongoing challenging consumer environment, the impact of mandatory carded play and cash limits in NSW, and costs associated with ongoing remediation activities,” Star said.
On a positive note, the company achieved EBITDA breakeven in November and December, “reflecting the impact of seasonally higher revenue in December 2024 and the benefit of the Group’s cost reduction program.”
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