Here's why the Star Entertainment share price just hit another all-time low

The casino operator's shares fell to 60 cents apiece today.

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The Star Entertainment Group Ltd (ASX: SGR) share price tumbled to another new all-time low on Thursday.

Star Entertainment shares reached an intraday low of 60 cents, down 4.44% for the day so far.

This makes Star Entertainment one of the top five fallers of the ASX 200 on Thursday.

Let's find out why.

Star Entertainment share price tumbles to cap raise price

The new low comes amid yesterday's announcement of a $750 million capital raising at 60 cents per share. At the time, that was a 20% discount on the last closing price.

So, it's not surprising to see the Star Entertainment share price fall to the same price on the open market.

The casino operator has completed the institutional component, raising $565 million from investors. It's now commencing the retail component, seeking a further $185 million from ordinary investors.

Top shareholder rejects entitlement

A report by the Australian Financial Review (AFR) today reveals that Star Entertainment's top shareholder did not participate in the capital raising.

Bruce Mathieson became a substantial holder of Star Entertainment shares in February.

He owns just under 95 million shares, or a 9.97% stake in Star Entertainment. That means he was entitled to about 57 million additional shares under Star's one-for-1.65 institutional rights issue.

However, the AFR reports that going above a 10% holding requires regulatory clearance, so that may have been the reason Mathieson chose not to participate.

In addition to the capital raise, the company has taken on $450 million in new debt facilities.

The company said the funds would provide "increased financial flexibility to address known and expected liabilities over the medium term, and help finance the ongoing needs of the business and expected joint venture contributions".

The company's liabilities include a $100 million-plus remediation program over the next few years after two separate inquiries in NSW and Queensland found it unsuitable to hold a casino licence.

This is the second capital raising conducted by Star Entertainment this year.

In February, Star Entertainment announced an $800 million raise at $1.20 per share.

That raising comprised a $685 million three-for-five pro rata accelerated non-renounceable entitlement offer and a $115 million institutional placement.

The raising was announced alongside a $1.3 billion loss for 1H FY23.

During last month's earnings season, Star Entertainment reported a full-year statutory net loss of $2.44 billion.

The company commented that Australians were spending less amid the cost of living crisis, resulting in weaker patronage at their venues.

Motley Fool contributor Bronwyn Allen has positions in Macquarie Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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