Star Entertainment Group Ltd has reported a steep decline in cash reserves, compounding its ongoing regulatory and operational challenges.
Shares of the troubled casino operator fell to a record low of A$0.145 this morning — down 26% from the previous close.
In an update to the ASX, the group revealed available cash of $79 million as of December 31, 2024, a decline of $70 million, or 46%, from the previous quarter's balance of $149 million.
The drop includes the impact of drawing down the first tranche of a new $200 million debt facility in early December, which resulted in a net cash increase of $37.1 million. Star is working to meet conditions for the second tranche of its funding deal while exploring other liquidity options.
Excluding the drawdown, Star's available cash dropped by around $107 million in the final quarter of 2024.
Star attributed the cash burn to difficult trading conditions, essential capital expenditure and regulatory fines.
The company paid the first $5 million instalment of a $15 million fine imposed by the New South Wales Independent (LON:IOG) Casino (EPA:CASP) Commission (NICC) for regulatory failures. Legal and consulting fees, transformation efforts and joint venture contributions for the Queen’s Wharf Brisbane precinct have also weighed heavily on liquidity.
Chief executive Steve McCann recently emphasised the group’s precarious position, citing "continued weakness in operating performance" and regulatory hurdles.
The company will release its half-year results on February 28. The company’s share price fell by 63% in 2024, reflecting investors’ concerns over the group’s viability amidst its ongoing challenges.