Star Entertainment needs money — urgently.
The company has been walking a tightrope of financial difficulty for months and all signs point to the casino operator losing its balance and falling into administration this week, experts warn.
It entered a trading halt on Friday after missing its deadline to report its half-year results to the Australian Securities Exchange (ASX).
On Monday, in a note to the ASX, Star said it would be “unlikely to be in a position to lodge its [results] until it has secured a refinancing commitment that would enable The Star to refinance all of the Group’s existing corporate debt, as well as to provide additional liquidity”.
“There remains material uncertainty as to the Group’s ability to continue as a going concern.“
In other words, Star needs cash, and a lot of it, to survive.
How is Star still able to operate?
Australian companies aren’t allowed to operate while they are insolvent — that is, unable to pay their debts.
So how is a company like Star, that has sent out multiple distress signals about its finances in recent months, still running?
Jason Harris, professor of corporate law at the University of sydney, said it’s very likely Star is insolvent and using “safe harbour” provisions to continue…
