The ASX-listed casino operator has been negotiating with its lenders for days. But delays getting security over individual properties is slowing down progress.
Star Entertainment’s banks are pushing back against the casino operator’s pleas for more short-term debt, arguing any new loan should be matched by government concessions and increased security over assets including properties.
The Star in Sydney’s Pyrmont. The company’s shares have been suspended since last week, when it failed to lodge accounts.Sources close to the lenders said delays getting security over Star’s individual properties had driven a wedge between the company and its banks. The lending group was put together by Westpac and Barclays last year and also includes Macquarie, Deutsche Bank, Washington H. Soul Pattinson, Perpetual and Regal Partners, according to an information memorandum circulated during the syndication process.
Star’s shares were suspended on Monday after the company failed to file its financial results with the ASX over the weekend. The trading first halted on Friday after the release of a report, authored by Adam Bell, SC, intoMr Bell’s report was scathing of Star’s previous board and management and found four compliance breaches, but was optimistic about the future of the Sydney precinct under new chief executive Steve McCann.
The casino group and its joint venture partners entered a contract with the Queensland government in 2015 to develop the precinct, which was initially expected to cost $2.6 billion, but multiple delays have already brought the total cost to $3.6 billion.Cost increases in Queensland have further strained Star at a time when the number of high-rollers visiting its casinos remains low.
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