Published: September 25, 2023

Australian casino group Star Entertainment to raise $481 million in equity

(Reuters) -Australian casino operator Star Entertainment Group is tapping the capital markets for a second time in 2023 as it aims to raise A$750 million ($481.43 million) as part of a major capital restructure to strengthen its balance sheet.

The company said on Monday it would raise capital at A60c per share, a 20% discount to the final closing price last Friday of A75c.

The capital raise consists of a A$589 million 1 for 1.65 pro-rata accelerated non-renounceable entitlement offer and a A$161 million institutional placement, according to a statement.

Star said in a statement it would also take on A$450 million of new debt provided by Barclays and Westpac, and its existing debt will be repaid and cancelled following the capital restructure.

The company raised $A800 million in February at A$1.20 – double the price of the capital raising announced on Monday.

Regulatory restrictions on Star’s Sydney operations from mid-2022 and stiff competition from bigger rival Crown Resort have chipped away at profits for Star, Australia’s second-biggest casino operator.

Star had a net debt of A$596 million, as of June 30, a strong reduction from its debt levels of A$1.11 billion at end-2022.

The casino operator posted a net profit after tax attributable, before significant items, of A$41 million for fiscal 2023, versus a loss of A$31 million a year earlier.

Star, though, took a major impairment charge of A$2.48 billion, excluding taxes, as it had to write down significant items from volatile operating conditions at its Sydney operations and regulatory and legal costs.

($1 = 1.5579 Australian dollars)

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