Star Entertainment locks in debt package, preps $750m equity raising

afr.com:

Star Entertainment was putting the finishing touches to a comprehensive capital restructure on Sunday night, which is expected to include a $750 million equity raising, Street Talk can reveal.

It is understood the cash call, to be managed by Barrenjoey Capital Partners and launch as early as Monday, will be accompanied by a $450 million debt package backed by Westpac and Barclays.

Star Entertainment boss Robbie Cooke. Louie Douvis

The raise and debt package would eliminate Star’s existing loans, which were part bank debt/part US private placement bonds, sources said.

Star’s accounts, released in late August, recorded a weak financial performance, and showed a company whose operations were barely bringing in enough cash to pay the bills. The year to June 30 was the worst in Star’s history.

The result was staggering; a $2.44 billion loss, mostly thanks to the $2.17 billion written off the value of its casinos, which flowed through to a much smaller asset base. 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. The main numbers were all by far the worst since Star was spun out of Tabcorp and listed on the ASX in June 2011.

The capital refresh is expected to not only eliminate Star’s hefty debt load, but fund costs associated with Queen’s Wharf in Brisbane, one of Star’s two big development projects under way, with the other being Tower 2 in Gold Coast.

Star has estimated Queen’s Wharf’s project costs would be $2.9 billion. It has been a dispute with the builder, Multiplex, which has delayed construction. Multiplex, recently moved the Supreme Court of Queensland to seek declarations and orders regarding timeline extensions, milestone