Star Entertainment is searching for a cash injection to avoid imminent collapse amid a further deterioration in its financial position.
The embattled casino operator told the ASX it expected to receive “one or more” liquidity proposals on Friday so that it could continue to operate.
“As noted in the company’s recent ASX announcements, there remains material uncertainty as to the group’s ability to continue as a going concern,” Star told shareholders.
Star, which operates casinos in Brisbane, Sydney and the Gold Coast, has been on the brink of collapse for weeks amid declining revenues, licensing headaches and major operational disruptions.
Shareholders had hoped it could attract a white knight investor, sell assets or access new funding streams to stay afloat.
The issues came to a head on Friday morning after it failed to lodge its financial accounts, as scheduled. It promptly entered into a trading halt, whereby investors are no longer able to trade its shares, in a sign that it could no longer guarantee it had the funds to keep operating.
Star then confirmed in a note to the ASX that it is “continuing to explore possible liquidity solutions that might materially increase the group’s financial liquidity position”.
Star was contacted for additional comment.
The casino operator will only be able to lodge its financial books, and resume share trading, if its board determines the anticipated proposals to inject liquidity would be sufficient for the business to keep operating.
Star employs about 8,000 people, although its casinos would probably still operate in the event of an administration and a search for a new owner. The business could also be broken up.
The casino operator has experienced a sharp decline in high rollers from Asia in the aftermath of a NSW inquiry that found Star facilitated hundreds of millions of dollars in banned transactions, exposing it to money laundering.
It also suffered a massive cost blowout in construction of its new Queen’s Wharf facility, adding to Star’s financial woes.
There would be particular public interest in what happens to the casino at Queen’s Wharf, which has been billed as a postcard tourism precinct for Brisbane and the city’s 2032 Olympics.
Shares in Star have been trading at around the 12c mark. Its stock traded at above $5 in early 2018.
