Star Entertainment launches $750m equity raise at 60c a share

afr.com:

Embattled casino operator The Star Entertainment Group rolled the dice on a $750 million equity raise priced at 60¢ a share on Monday evening, after Street Talk revealed preparations for the cash call on Sunday evening.

Star last raised $800 million in February at $1.20 a share. Oscar Colman

The offer price was a 20 per cent discount to Star’s 75¢ last traded price. It is also substantially lower than the $1.20 a share at which Star last tapped equity capital markets for $800 million in February.

The latest equity raise is split into a $161 million placement and a $589 million rights issue. The latter was on a one-for-1.65 pro rata accelerated non-renounceable entitlement offer.

Barrenjoey was mandated as the sole broker.

As flagged by Street Talk, Star has also secured a $450 million debt package backed by Westpac and Barclays. Together, the equity and debt package would eliminate Star’s existing loans, which were part bank debt/part US private placement bonds. It would also bankroll Star’s costs at Queen’s Wharf in Brisbane.

Star has previously estimated project costs of $2.9 billion. It has been a dispute with the builder, Multiplex, which has delayed construction. It is now slated for a phased opening from April 2024.

It comes after harrowing full-year results, where Star posted a $2.44 billion loss, mostly thanks to the $2.17 billion written off the value of its casinos. It had only $43.8 million in cash flow from operating activities, down from $176.2 million in the much quieter (for casinos) 2022 fiscal year.

Key financials were all by far the worst since Star was spun out of Tabcorp and listed on the ASX in June 2011.