Australia’s Star Entertainment Group has announced a comprehensive refinancing and further capital structure initiatives as part of its ongoing efforts to reduce short-term liabilities and provide greater financial flexibility.
Under these new initiatives, the Australian casino operator will raise AU$750 million (US$482 million) in equity by way of a AU$589 million (US$482 million) 1 for 1.65 pro rata accelerated non-renounceable entitlement offer and a AU$161 million (US$103 million) institutional placement.
It has also secured AU$450 million (US$289 million) of new debt facilities provided by Barclays Bank PLC and Westpac Banking Corporation, comprised of a AU$150 million (US$96.3 million) four-year revolving credit facility and a AU$300 million (US$193 million) four-year underwritten term loan.
Star will, subsequently, repay and cancel AU$668 million (US$429 million) in existing debt, with no debt maturities until 2H27. The initiatives will also allow Star to retain all of its assets following recent reports that it may look to sell off some or all its Sydney integrated resort, The Star Sydney.
In a filing, Star said the initiatives are designed to provide it with increased financial flexibility to address known and expected liabilities over the medium term, and to help finance the ongoing needs of the business and expected joint venture contributions.
“Today’s announcement is a key milestone in the renewal of The Star,” said Group Chief Executive Officer and Managing Director, Robbie Cooke.
“With an optimized capital structure, strengthened balance sheet and enhanced flexibility, we have a strong platform from which to deliver on our renewal program and strategic priorities.”
Dividends will remain suspended until adjusted net leverage ratio is below 1.5x, resolution of AUSTRAC civil proceedings and completion of QWB debt refinancing, the company added.
Following on from inquiries into its operations in NSW and Queensland, Star recently reported a net loss of AU$2.44 billion (US$1.57 billion) for the year ended 30 June 2023 due to significant items, namely AU$2.17 billion (US$1.40 billion) in non-cash impairment at The Star Sydney and The Star Gold Coast, ongoing regulatory and legal costs of AU$595 million (US$383 million), debt restructuring costs of AU$54 million (US$35 million) and redundancy costs of AU$16 million (US$10.3 million).
