Investors refuse to catch a falling Star as embattled casino operator cops a hammering on return to trade

Shares in embattled Star Entertainment Group have been obliterated on their return to the Australian Securities Exchange, with almost half of the casino operator’s market value wiped out in a matter of minutes.

The stock was down 46 per cent to just 24¢ half an hour after the opening bell on Friday. At that price, the company is now valued at just under $690 million.

Star has not traded on the ASX since the end of August after it failed to present its accounts.

The company has been facing myriad regulatory and financial problems, which culminated in it yesterday booking a statutory loss of $1.685 billion for the past financial year and warning investors it still faces a “significant” liquidity crisis.

The 2023-24 loss — detailed in the delayed results published on Thursday — included an impairment charge of $1.44b as Star faces the prospect of losing its Sydney gaming licence after NSW gaming authorities last month found that it remained unfit to operate its flagship casino

Star blamed the abysmal performance on a marked slowdown in punter spending amid cost-of-living pressures and soaring operating costs.

That trend has carried through to the first two months of the new financial year and earning-before-tax losses amounted to almost $8 million.

Star said it was now looking at slashing hundreds of jobs and selling off non-core assets to stay afloat.

After weeks of talks, it has also managed to win a $200m debt facility from unnamed corporate lenders that will come in two highly-conditional tranches.

The first will be available from the end of October but will come with an annual interest rate of 13.5 per cent — a similar rate that some distressed builders in China are paying, according to Bloomberg.

Even so, Star says its financial woes are far from over.

“There are a number of significant challenges currently facing the business from an earnings, liquidity and balance sheet perspective,” said chief executive Steve McCann said.

“We recognise and appreciate the support provided to date by our stakeholders as The Star puts in place a new management team and strategy to implement a remediation and transformation program, and return the company to a more sustainable footing.

“However, time and flexibility is required to implement these initiatives.”

The former Crown Resorts and Lendlease boss took the reins at Star in June and is widely seen as the company’s best hope to right the ship.

“The list of issues for Star to navigate continues to grow,” Simon Thackray, an analyst at Jefferies (Australia), said in a report. “At this point in time, we see considerable uncertainty.”

Mr Thackray said the focus should be on Star’s ability to service its debt “given a deteriorating earnings base that is under structural pressure on both revenue and costs”.