Australia’s Star Entertainment Group confirmed Wednesday that ongoing discussions related to its troubled liquidity position have included considerations around the application of provisions in the Corporations Act 2001 (Cth), specifically the safe harbour provisions.
Those provisions are designed to allow directors of a company to pursue restructuring rather than placing it into administration by offering protections against personal debt liability should the restructure ultimately fail.
As reported by Inside Asian Gaming, Star is said to be on the verge of collapse following a second finding of unsuitability in NSW, home of The Star Sydney, and has asked governments in both NSW and Queensland for tax relief. The NSW government, which has already postponed a substantial increase in poker machine tax and granted an extension to the deadline for introducing mandatory cashless gaming, has reportedly rejected any further relief.
However, the Queensland state government is said to be considering some sort of assistance given that Star only last week held the Grand Opening for its AU$3.6 billion Queen’s Wharf Brisbane development – seen as a critical piece of tourism infrastructure for the city. Queensland is also home to The Star Gold Coast.
Providing a Market Update via the ASX on Wednesday, Star confirmed it is “currently reviewing its financial and liquidity position with various advisers in the context of seeking to finalize its preliminary financial report for the financial year ended 30 June 2024 (FY24), including holding discussions with various stakeholders in relation to its liquidity position in light of adverse trading and other conditions.
“The Company confirms that the advice being provided has extended, from time to time, to considering the application of provisions of the Corporations Act 2001 (Cth) (including the safe harbour provisions).
“The Company is working to finalize its FY24 preliminary financial report, although the timing of its release has not been finalized.”
Star’s perilous financial position stems from a combination of significantly higher compliance costs imposed due to historical AML and responsible gambling failures, a softer domestic gaming market due to economic tightness, and the absence of international high rollers.
