Their alleged incuriosity, their reliance on what they were told by management, and the extent to which directors have a responsibility to grab a shovel and do some independent digging into the operations and risks of the company they are paid to govern, will all come under scrutiny as the trial continues.
The notion that gambling is a crap shot is understood – but what’s truly being tested now are the risks associated with managing casinos. And as if the courtroom drama weren’t enough, the casino operator’s current board and management are engaged in a desperate struggle of their own in a bid to keep the lights on.
Those with even a passing interest in the future of the Brisbane, Gold Coast and Sydney casinos will be glued to the speculation that Star is furiously, but thus far unsuccessfully, attempting to sell various assets in the business.
Cost overruns at the Star Casino and Queens Wharf complex in Brisbane have added to the group’s financial woes.Credit: Glenn Campbell
On Monday, Star confirmed media reports it had been negotiating to sell its 50 per cent interest in the Brisbane Queens Wharf casino precinct, to its joint venture partners Chow Tai Fook Enterprises and Far East Consortium.
According to its announcement, a deal couldn’t be reached that provided sufficient value for Star. Meanwhile, some media reports have suggested the parties couldn’t find a mutually agreeable management fee.
The fact that Star is desperate enough to sell its interest in the newly built crown jewel asset in Queensland has been viewed positively by shareholders because the punters now know there is nothing sacred left inside Star’s stable of assets. Nothing is off the table, and there’s a good reason for that.
Desperate doesn’t begin to describe Star Entertainment’s financial predicament. It is chewing through cash faster than its casinos are generating it. Its bankers are running out of patience and demanding it sell assets or raise more equity or debt within weeks.
There is still a good chance that Star could still sink into the abyss, despite the best efforts of its current management. So maybe, keep your eye out for used merino/cashmere blankets and packets of elastic bands on Facebook marketplace – they might be going cheap.
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