Star Entertainment Group Ltd (ASX: SGR) shares remain on ice this week, with no change expected until the embattled casino giant reports its annual results.
As a reminder, Star Entertainment shares have been suspended from trading since 28 August following a company-requested trading halt.
This comes after a string of allegations and findings against the company.
Star shares are frozen at 45 cents. The company is expected to report its annual results in the next week or so. Here's the latest in the saga.
Star's $100 million lifeline
Star Entertainment is said to have secured a verbal commitment from its lenders to inject $100 million in cash.
According to The Australian Financial Review, the funding is part of a five-point plan to stabilise the company's finances without selling its key casino assets.
A second round of funding may become available if required, providing further financial cushioning.
Star's turnaround plan also focuses on securing additional loans, obtaining duty relief in Queensland, and cutting costs.
The sale of the former Treasury Casino in Brisbane for $67.5 million is part of this strategy.
If all goes according to plan, this package could provide Star with $300 million to $350 million to tackle its immediate cash crunch. This could impact Star Entertainment shares.
The bigger picture: Regulatory clampdown
It's far more than just finances in the debate for Star Entertainment shares. The company is also grappling with regulatory challenges.
Following the scathing findings of the Bell Two Report, the New South Wales Independent Casino Commission (NICC) issued a 'show cause' notice to Star.
It demands the company demonstrate how it plans to address concerns about its suitability to hold a casino licence.
The NICC has also requested detailed submissions on Star's current financial position and future viability plans.
Star must respond to the NICC by 27 September 2024.
Shareholders speak out on Star Entertainment shares
The regulatory clampdown is the overhanging risk factor for Star, and now the company's major equity holders are starting to speak up.
Major shareholder and fund manager Wilson Asset Management (WAM) has been vocal about its dissatisfaction.
Per the AFR, the fundie is pushing for more asset sales to recover some of its investments in Star.
WAM also said Star's "deterioration in earnings" and capital required were two factors it "absolutely got wrong" in analysing the company.
Star Entertainment shares will remain suspended until the company finalises its FY24 report, which is expected sometime in the next week or two.
Star Entertainment shares takeaway
Star Entertainment shares are caught in a high-stakes gamble. As the company stabilises its finances without resorting to fire sales of its casinos, the stock remains in a trading halt.
In the twelve months to August 28, it had slipped 19% into the red.
