Star Entertainment Halts Trading, Raising Fears of Imminent Collapse

Shares of Star Entertainment were halted during Friday trading in Sydney, fueling concerns that the struggling casino operator might not deliver its half-year results as scheduled. Investors fear the next announcement could be that the company cannot continue operating as a going concern.

Missed Deadlines and Risk of Suspension

This marks the second time in six months that Star has missed a financial reporting deadline. If it fails to release data for the six months ending December 31, 2024, the Australian Securities Exchange (ASX) could suspend the stock.

In a statement to the ASX, Star noted it expects to receive potential liquidity proposals during the day.

“Star Entertainment Group refers to recent media speculation and confirms that the Company is continuing to explore possible liquidity solutions that might materially increase the Group’s liquidity position,” the statement read.

State Street Slashes Stake in Star

Adding to the pressure, Star revealed during Thursday’s trading session that State Street — one of the world’s largest asset managers — cut its stake from 177.17 million shares to 147.97 million shares, reducing its ownership to 5.16%.

Potential Liquidity Proposals and Rescue Efforts

Although there’s​ nо guarantee​ оf​ a deal, speculation​ іs rampant.​ In January, reports surfaced that Cerberus Capital Management was​ іn talks​ tо buy some​ оf Star’s debt. More recently,​ a US-based private equity firm reportedly offered​ tо refinance the company’s liabilities.

There are also rumors that Blackstone (NYSE: BX) might​ be interested​ іn acquiring Star’s casino resorts, though likely only​ іf the assets​ gо into administration. Blackstone has not publicly confirmed interest.

Meanwhile, executives from Bally’s (NYSE: BALY.T) recently met with Star management, further fueling speculation that the regional casino operator might consider​ a takeover.

Mounting Challenges and Uncertain Future

Star’s portfolio includes prime properties like The Star Sydney, The Star Brisbane, and The Star Gold Coast. However, the allure of these assets could be overshadowed by Star’s shaky cash flow and ongoing regulatory issues.

For Blackstone, acquiring Star would likely require regulatory approval, given its existing control of Crown Resorts. Yet, regulators might be more lenient if Star faces imminent collapse.

If no liquidity proposals emerge or are accepted, ASX could suspend Star’s shares as soon as Monday, March 3, further intensifying the company’s precarious position.