Star to raise $544.24 million in equity amid regulatory uncertainties

(Reuters) – Casino operator Star Entertainment Group said on Thursday it was looking to raise A$800 million ($544.24 million), even as the embattled firm tries to recover from regulatory concerns and impairment charges.

Star, which is reeling under a slew of government probes, COVID-19 curbs and three class actions, had recently flagged an impairment hit of up to A$1.6 billion to its first-half earnings as a direct impact of proposed tax rate hikes on casinos in New South Wales, which are likely to come into force in July.

“While the outcome of regulatory and other matters creates material uncertainty as to the Group’s ability to remain a going concern, the Group is likely to be able to meet its liabilities as and when they fall due over the next 12 months,” the second largest Australian casino operator said.

The capital raise will include a A$685 million entitlement offer and a A$115 million institutional placement, Star said, adding the balance of the equity raising is underwritten.

Adding to its relief efforts, Star said it will continue to pursue the recycling of non-core assets, including the sale of its Treasury buildings which are expected to contribute about A$233.0 million in additional cash.

(This story has been refiled to remove extraneous $ sign in paragraph 4)

($1 = 1.4699 Australian dollars)

(Reporting by Roushni Nair in Bengaluru; Editing by Krishna Chandra Eluri)