This legal measure allows the company to continue operating while safeguarding its leadership against personal legal repercussions.
Key points:
- Star Entertainment has invoked safe harbour provisions to shield directors amid financial struggles
- The company is facing liquidity challenges, with significant cash depletion and limited access to loan funds
- The company seeks government support while working through regulatory and financial challenges
- Macau investor Xingchun Wang has increased his stake, becoming a major shareholder during this turbulent period
Star Entertainment Group has implemented safe harbour provisions to protect its directors from potential insolvency trading liability as the casino operator continues to face significant financial pressures.
The safe harbour mechanism comes into play as Star navigates a period of significant cash depletion, having reported only AU$79m in unrestricted cash as of late.
Despite securing an AU$200m loan in September 2024 to alleviate short-term pressures, only half of the funds have been released. In the December quarter alone, the company utilised AU$107m of its available cash.
FTI Consulting has been appointed as Star’s safe harbour advisor, providing guidance on managing creditor relations and ensuring compliance with lender requirements. This includes seeking lender approval for any state or federal government aid – a request that has so far been unsuccessful.
Under the safe harbour provisions, the company's directors receive protection from personal liability in case of insolvency, while creditors gain increased influence in corporate decision-making.
Good to know: Star has been under regulatory supervision since 2022, when it lost its operating licence following investigations into alleged money laundering and criminal enterprise links
Star’s CEO, Steve McCann, has urged the government for gaming tax relief, emphasising the company’s efforts to restructure its operations and protect frontline jobs. He stated: “Our ask from the government hasn’t changed.
“We are making good progress with our remediation plans; we’re looking at all options through our business restructure to retain the vast majority of frontline jobs. We need time to reset the business."
Meanwhile, Macau businessman Xingchun Wang has emerged as a significant investor, increasing his stake to 6.52% through the purchase of 28 million shares at approximately 11 cents each. This investment has contributed to a 27% rise in Star's share price, though it remains significantly below its 2018 peak of over $5.
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