The Star Entertainment Group to Raise $770,000 to Cover Existing Debts

The Star Entertainment Group, an Australian casino and hospitality company, continues to encounter financial trouble following its recent regulatory hurdles. Amid these difficulties, the company unveiled its plans to raise AUD 1.2 billion (around $770,000) to reinforce its business and deal with existing debts.

As outlined in an ASX announcement, Star Entertainment will use a mix of equity and debt measures to raise the money. According to the company, the move will include AUD 750 million in equity raising plus AUD 450 million of new debt facilities.

The raising will be comprised of an AUD 589 million 1 for 1.65 pro rata accelerated non-renounceable entitlement offer and an AUD 161 million institutional placement.

The debt facilities, meanwhile, will be provided by Barclays Bank and Westpac Banking Corporation. They will be comprised of an AUD 150 million four-year revolving credit facility and an AUD 300 million four-year underwritten term loan.

The financial move will provide further relief to the company following its recent tax relief agreement with the government of New South Wales.

CEO Cooke Called the Move a “Key Milestone”

The move will help Star Entertainment settle its debts and represents the culmination of the company’s broader refinancing process. The refinancing and further capital structure initiative announced by the company are expected to provide the company with the flexibility it needs to address its liabilities and support its operations. In the meantime, the company will retain its strategic, world-class assets.

The company added that it has suspended dividends adjusted net leverage ratio is below 1.5x.

Robbie Cooke, The Star Entertainment Group’s chief executive officer and managing director, commented on the refinancing measures, calling them a “key milestone in the renewal of The Star.”

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.

Robbie Cooke, CEO & MD, The Star Entertainment Group

The company’s share price continues to decline in the wake of the regulatory trouble experienced by the company. Despite that, Star Entertainment remains optimistic that its remediation plan and financial strategy will help it bolster its profitability while allowing it to remain compliant.

Speaking of Star’s remediation plan, the company recently revealed that it has already implemented 22 of the 30 Bell Review recommendations.