Lenders Reject Star's Attempts to Waive Covenant Agreements
The Star Entertainment Group's Financial Struggles Continue
The Star Entertainment Group, Australia's largest casino operator, is facing ongoing financial difficulties, as revealed by a series of recent developments.
The company has been unable to secure lender waivers that would allow it to breach the terms of its debt agreements, a situation that has been exacerbated by the regulatory trouble the group has encountered. This has resulted in significant losses of finance and investor trust.
In an effort to alleviate the financial strain, The Star has been in discussions with its lenders regarding "likely covenant waivers." These discussions have been centered around potential covenant waivers for September 30 and December 31. However, the SFA lender group has proposed terms for these waivers that have been deemed unacceptable by The Star.
The lenders of The Star include Deutsche Bank, Macquarie, and Washington H. Soul Pattinson. Despite these challenges, The Star continues to rely on the support of its lenders under the Senior Facility Agreement.
The regulatory troubles have also impacted The Star's business operations. The company's planned sale of its interest in the Destination Brisbane Consortium (DBC) has fallen through, and the sale of its 50% stake in Brisbane's Queen's Wharf casino to Chow Tai Fook Enterprises and Far East Consortium for AUD 53 million is yet to be finalised.
The company currently anticipates lodging unaudited accounts for the period ended 30 June 2025 with the ASX on Friday 29 August 2025. However, the lenders' refusal to grant waivers has hindered the finalisation of these accounts. The Star is targeting finalisation of its audited accounts during September 2025 and lodgement with the ASX by 30 September 2025.
The Australian Financial Review published an article claiming that the lenders refused to grant waivers for a $430 million loan. The Star's official response to the Australian Financial Review confirmed that it continues to rely on its lenders' support under the Senior Facility Agreement.
The company's financial troubles have been reflected in the market, with its shares currently trading at AUD 0.10 apiece. The Star's market capitalization has continued to plummet, reflecting the uncertainty surrounding its financial future.
The SFA lender group has proposed terms for the covenant waivers that are unacceptable to The Star (a repetition of an earlier fact). Additionally, the SFA creditor group demands unacceptable deadlines of less than 15 business days to grant the requested constitutional amendments.
As The Star navigates these challenges, it remains to be seen how the company will manage its financial situation moving forward.
