Hong Kong’s Chow Tai Fook Enterprises Limited and Far East Consortium International Limited have seen their combined stake in Australian casino operator Star Entertainment diluted following the latter’s recent institutional placement equity raising initiative.
Star revealed via a series of filings on Thursday that the companies’ previous 9.99% interest had now fallen to 6.86%, despite them having last week contributed AU$80 million to Star’s AU$595 million (US$401 million) placement.
Under the new shareholding arrangement, Chow Tai Fook subsidiary Firmament Investment Pte Ltd holds 47,377,137 ordinary shares, representing 3.43% of voting power in Star, while Far East Consortium International Limited also holds a 3.43% stake.
The two companies each paid AU$245 million to acquire a 4.99% stake in Star in 2018 as part of a Strategic Alliance. Each also holds a 25% interest in the Destination Brisbane consortium – Star hold the other 50% – which is developing an AU$3.6 billion integrated resort project in Brisbane, due to open by the end of this year.
In a Thursday filing, Star noted that its constitution, as well as certain agreements entered into with Liquor and Gaming NSW and the Queensland Office of Liquor and Gaming Regulation, contain restrictions prohibiting an individual from having a voting power of more than 10% in the company. However, it also described the dilution of Chow Tai Fook and Far East Consortium’s dilution as “temporary”.
Star embarked on its equity raising initiative earlier this month after reporting a net loss after tax of AU$1.26 billion (US$849 million) in 1H23, which included AU$1.31 billion (US$892 million) in “significant items” – mostly emanating from regulatory action taken against it for failings uncovered across recent inquiries in NSW and Queensland.
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