“Star has to maintain itself as a viable casino … we’ve obviously been working with them over a period of time on a range of issues, including the importance of the employment that is there, and will continue to do so,” she said.
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Star did not name the parties that are expected to provide an offer of financing, but it has confirmed previously that US finance giant Oaktree has tried to buy out Star’s debt from its lenders. US casino operator Bally’s has reportedly shown interest, as has billionaire Clive Palmer.
Chow Tai Fook and Far East, co-investors in Star’s Queen’s Wharf casino in Brisbane, attempted to buy Star’s share of the asset, and shareholder billionaire Bruce Mathieson has made an offer for Star’s Gold Coast casino.
After a brief trading halt on Friday morning, Star shares plunged 15.4 per cent to 11¢, valuing the company once worth $5 billion at about $315 million.
Star chief executive Steve McCann has unsuccessfully tried to coax lenders, state governments and investors into giving the embattled casino operator the time and cash needed to work through its challenges.
He has also previously warned Star’s stakeholders that in the event of a collapse, an administrator would need $350 million in funding to ensure it remained operational.
Queensland Premier David Crisafulli said Star’s workers were the key priority for his government.
“My only concern is for the working people there. My non-negotiable is that place has got to stay open,” he said.
“If whoever runs it in the future wants to talk to us about what future opportunities look like it … it is about the workers.”
The Australian Financial Review reported that the company had failed to raise the funding required to meet near-term payments, including for payroll, which puts the company at serious risk of running out of cash.
Before signing the accounts, a board of directors must be satisfied that the company is a “going concern” – that it can pay its debts when they fall due.
Star, led by chief executive Steve McCann, is in a desperate struggle to meet the conditions of a loan agreement that will give it access to $100 million.Credit: Dominic Lorrimer
In September last year, Star’s directors started getting advice on “safe harbour” provisions provided by the Corporations Act that would protect them from being personally liable for debts in the event that it cannot stay solvent.
The provisions are used when a financially struggling company is considering a last-ditch restructuring attempt as an alternative to financial collapse and calling in administrators.
At its annual investor meeting in November, McCann and Star’s chair, Anne Ward, warned of the challenges ahead as its casinos struggled with the implementation of a ban on cash-based gambling – a measure to avert money laundering – which saw gambling on its poker machines dive.
“I would note that the regulatory environment and challenges [of] technology upgrades and other matters we’re dealing with in Australia are quite unique to the Australian market.
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“We need to implement those, and we need to make sure that we understand what the revised revenue model is for our business across gaming and non-gaming over time,” McCann said at the meeting.
Ward added: “Continuing as a going concern will require us to be successful in relation to a range of matters, and they include meeting the various conditions precedent to secure the drawdown of the new debt, securing additional sources of liquidity, further progressing our plans for longer-term funding, implementing cost-reduction plans that we’ve outlined, completing non-core asset sales and continuing to progress our remediation plan in order to reach suitability [to hold a casino licence].”
