Star receives lukewarm reception from insto investors in $565m raise
Star Entertainment says it has raised $565 million from investors after receiving “significant interest”, even though the take-up rate on the institutional entitlement offer was only 67 per cent.
The raise – and a retail component worth $185 million – is part of a broader package of measures designed to shore up the embattled casino group. Star earlier this week said it had secured $450 million in new debt facilities.
Robbie Cooke says the capital raise gives Star a “strong platform from which to deliver on our renewal program and strategic priorities”. Louie Douvis
“The refinancing and further capital structure initiatives announced yesterday represent a key milestone in the renewal of The Star”, said the company’s chief executive, Robbie Cooke. “With a strengthened balance sheet and additional flexibility, we have a strong platform from which to deliver on our renewal program and strategic priorities.”
The Australian Financial Review’s Street Talk column first flagged the deal on Sunday. It followed an extensive strategic review undertaken by Barrenjoey Capital Partners after Star was buffeted by intense regulatory scrutiny and hundreds of millions of dollars in penalties for breaching anti-money laundering and counterterrorism financing laws.
But the new shares are being issued at 60¢, a 20 per cent discount to the last trading price of 75¢ on Friday. It last issued shares in March at a 21 per cent discount. However, Jefferies’ Simon Thackray said the “cleaning of the balance sheet will be a meaningful catalyst for investors”.
“[The discount] highlights the difficulties that Star has had to navigate in a post pandemic world which was meant to be a period of meaningful earnings recovery for the entertainment group,” he
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