Star Entertainment Group Ltd (SGR.AX) said it was raising A$800 million ($545 million) to repay debt and suspending dividend payments, as it turned in a record statutory loss for the first half of the year amid tough business conditions in Sydney.
Regulatory restrictions on its Sydney operations from mid-September and stiff competition from bigger rival Crown Resort that started operating there in August have chipped away at profits for Star, Australia’s second-biggest casino operator.
The capital raising, comprising a A$685 million 3-for-5 rights offer and a A$115 million institutional placement, will help Star repay debt and increase liquidity, the company said on Thursday. It had a net debt of A$1.11 billion as of end-2022.
The shares in the capital raising are being sold at A$1.20 each, 21% below Star’s latest closing price of A$1.52.
Major shareholders Chow Tai Fook Enterprises and Far East Consortium (0035.HK) have taken up their rights entitlements and committed $80 million to the capital raising, Star said.
For the first half of the year ended Dec. 31, Star reported a record statutory net loss after tax of A$1.26 billion, versus a loss of A$74.2 million a year earlier.
This report’s information was first seen on REUTERS; to read more, click this link.
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