Casino operator Star's shares plunge amid grim finances

Star Entertainment shares have plunged by more than 20 per cent to an all-time low after the casino operator revealed its financial predicament has become more dire.

Star said on Wednesday evening it had $79 million in available cash at year-end, having burnt through $107 million in the past three months.

It has a potential lifeline in the form of a $100 million debt facility, but hasn't been able to access that capital.

Star has already borrowed $434 million at a 13.5 per cent interest rate, and its lenders have imposed numerous conditions on that last debt tranche.

"A number of these conditions remain challenging to meet given the Group's current circumstances," Star said on Wednesday.

The company wasn't more specific, but has previously said its lenders want it to raise another $150 million in what's considered "subordinated capital".

That means that if Star has to enter liquidation, the subordinated debt would only be paid out once its senior lenders are repaid.

It seems few are willing to lend to Star on that basis, given the questions about whether it will survive.

That $100 million debt facility is only available to Star until April 9, but Wednesday's update suggests Star would likely run out of cash before then.

Administration would be the most likely outcome.

Star's operations have also been loss-making as high rollers have stayed away from its tables amid the fallout of a money-laundering scandal from 2021.

In October, NSW required Star's gaming to be conducted through a cashless, carded system, which in its first few weeks cut Star's revenue by about 15 per cent.

Star has also been hit by significant legal and consulting fees and in the past few months paid the first $5 million of a $15 million fine imposed by the NSW Independent Casino Commission in October.

Star has more than 9000 employees at its casinos in Sydney, Brisbane and the Gold Coast.

Its shares were down 24.4 per cent to 14.75 cents late on Thursday morning.