Why is the Star Entertainment share price on ice today?

Star shares have been taken off market. What's going on?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published February 22, 2023 1:22 pm AEDT

It's been a pretty disappointing day for ASX shares and the ASX 200 Index so far this Wednesday. At the time of writing, the ASX 200 has slipped by 0.31% to under 7,315 points. But one ASX 200 share, perhaps mercifully, is sitting this session out. That would be the Star Entertainment Group Ltd (ASX: SGR) share price.

Yesterday, this ASX 200 casino operator and gaming company closed at $1.52 a share. And that's where it will be staying, at least for a while. This is due to Star announcing a trading halt for its shares this morning before market open.

Yes, in an ASX release today, Star announced that its shares would be put on ice.

Why?

A person wrapped in warm clothing with head, eyes and face covered by a hat, glasses and a scarf is coated in a layer of snow and ice. representing Strike Energy's trading halt today — Image source: Getty Images

Star share price on ice as capital initiatives announced

Well, Star Entertainment has told investors that "the Trading Halt is necessary as The Star expects to make an announcement to ASX regarding capital structure initiatives".

As such, the shares will remain halted until either 24 February or until "such time as The Star releases an announcement to ASX in relation to the capital structure initiatives".

And that's all we know for now.

Of course, the Star share price has had a truly awful month. Back on 13 February, the company released an earnings and guidance update which spooked investors mightily.

Star told the markets that it is anticipating a non-cash impairment charge of between $400 million and $1.6 billion in its half-year results, depending on the impact of the proposed changes to New South Wales casino duty.

It also declared that it is expecting to report full-year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) between $330 million and $360 million.

Investors were not impressed, to say the least. On the day this guidance came up, the Star share price cratered by a horrendous 20.74%, and lost another 13.4% the following day too, reaching a record-low share price of $1.28 in the process:

Until yesterday, the Star share price had recovered somewhat from these lows. But it will interesting to see what investors make of this latest announcement. Or indeed exactly what kind of "capital structure initiatives" Star has up its sleeve.

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