Disclosures from Australia’s Star Entertainment Group reveal that a Macau businessman has become one of the company’s largest shareholders after acquiring 158,270,748 ordinary shares representing 5.52% of issued share capital.
The shares, worth around AU$19.8 million (US$12.2 million) at Monday’s closing price, have been acquired by Mr Xingchun Wang across multiple transactions since September with his latest transaction on 10 January pushing him above the disclosure threshold.
The Australian Financial Review noted that Wang’s shares are registered to a Macau address and that he shares a name with a Macau businessman who is connected with a Hong Kong-listed coal group and was at one time described as one of China’s richest men.
It is said that he has spent around AU$35 million (US$21.6 million) to acquire the holding, although Star’s share price continues to plummet. From a high of AU$5.12 in 2016, shares had fallen to just AU$0.45 when Wang started acquiring shares in September and to AU$0.125 at close on Monday.
The acquisition of another AU$1.7 million (US$1.05 million) also comes at a curious time with Star revealing in a filing last week that it is quickly burning through its cash reserves despite having recently drawn down AU$100 million (US$61.6 million) from a new debt facility.
Morningstar analyst Angus Hewitt said in a note that there is a 50% chance Star will enter administration.
“At the current cash burn, the company would be lucky to make it to its interim results on February 28 … without a lifeline,” he said.
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