(Reuters) -Australia’s Star Entertainment flagged near-term liquidity requirements on Thursday and said it would look to raise capital, after the casino operator reported a 71% drop in annual profit due to challenging trading conditions.
The beleaguered firm had A$130 million ($88.97 million) in cash as of August-end, but will require more capital for group operations at current trading levels, restructuring activities and outflows regarding regulatory matters.
“Star continues to assess additional avenues to further support its liquidity position, including other potential capital sources such as subordinated debt,” the company said in a statement.
Star secured on Wednesday a two-tranche debt lifeline of up to A$200 million, with an immediate A$100 million injection to deal with cost blowouts the gaming group is facing at its new Queens Wharf resort in Brisbane.
Its underlying post-tax profit fell to A$12 million in the year ended June 30 from A$41 million in the prior year.
The company did not declare a final dividend, consistent with the previous corresponding period.
Star said its trading performance deteriorated over the second half of the financial year 2024, and it continued into the current fiscal.
The cash-strapped casino firm has been plagued with tighter regulatory controls, guest management, and governance compliance costs over the past two years following alleged breaches of anti-money laundering and counter-terrorism financing rules.
Trading was suspended in Star shares earlier this month, after the company failed to lodge its annual report for fiscal year 2024. The shares are expected to resume trade this week.
($1 = 1.4611 Australian dollars)
