Star’s spiral continues, but shareholders increase holdings

Star’s 2025 kicked off with bad news as the group announced on 8 January that its cash reserves had fallen to AU$79 million (£40 million/€47.4 million/$48.9 million) at the end of 2024. That total includes the first AU$100 million tranche from its new debt facility, which was drawn on 3 December.

This means that in the last three months of the year, Star’s available cash fell by AU$107 million. The company attributed this to multiple factors, including “difficult trading conditions”, fees and contributions to its Queen’s Wharf joint venture, “significant” legal and consulting expenses and the first AU$5 million instalment of the AU$15 million fine from New South Wales (NSW) regulators in reference to the Bell Two inquiry.

There is still another AU$100 million tranche that could be drawn from, but Star must fulfil certain requirements to access it. The company acknowledged that those conditions “remain challenging to meet given the group’s current circumstances”. Still, recent filings indicate that some investors are doubling down.

JPMorgan and… who?

A pair of ASX filings yesterday (14 January) showed that two shareholders are increasing their positions. The first is global powerhouse JPMorgan Chase & Co, which now holds about 182 million shares for a 6.3% stake in Star. This comes two weeks after the 2 January announcement that the bank’s stake was around 5%.

The other bullish investor is Mr Xingchun Wang, who increased his stake from 5.5% to 6.5%, or about 187 million shares. Not much is known about the mystery businessman, but some have reported that he has ties to Macau.

Regardless, Wang is now Star’s second-largest shareholder. He trails only Chow Tai Fook (9.6%), Star’s business partner in Queen’s Wharf.

Avoiding the “death zone”

The ongoing investment may not be enough to save Star from collapse. The company is still in the process of massive remediation efforts at its flagship Star Sydney property following the Bell Two ruling.

The NSW Independent Casino Commission will once again assess Star’s suitability for licensure in the state at the end of March. If its licence is revoked, that would open up a whole new set of difficulties.

Melbourne-based consultant Peter Cohen, who also served as a regulator for decades, questioned whether the operator would make it that far. He posited to iGB that Star might be “nearing the death zone” in that it might be “impossible to remain financially viable”.

Bailouts are rarely popular and state governments are even more averse to being seen as sympathetic or helpful to the gaming industry, Cohen said.