The crisis at Star Entertainment Group Ltd. deepened as the Australian casino operator slashed jobs, put its flagship Sydney property under review and said market conditions have deteriorated significantly. Shares in the company tumbled.
(Bloomberg) — The crisis at Star Entertainment Group Ltd. deepened as the Australian casino operator slashed jobs, put its flagship Sydney property under review and said market conditions have deteriorated significantly. Shares in the company tumbled.
Star is cutting 500 full-time roles, scrapping bonuses for this year and freezing salaries of some workers, it said Wednesday. Consumer spending is starting to weaken and regulatory restrictions — stemming from damning reviews into the company’s business practices — are increasingly weighing on earnings, Star said.
The company will “consider any structural alternatives available” for its Sydney casino, it said. Star said it’s accelerating debt refinancing plans to improve its liquidity and earnings are at unprecedented lows.
The trading update portrays the former gaming giant in its most fragile financial state, just as Australian authorities consider raising casino taxes. Star has already raised fresh equity since it was last year found unfit to hold gaming licenses in Sydney and in Queensland state, where it operates two other casinos.
Star shares sank 10% to A$1.22 at 10:34 a.m. in Sydney, cutting the company’s market value to A$2 billion ($1.3 billion).
Recent inquiries concluded Star had poor anti-money laundering controls, allowed patrons to flout China’s capital controls and was at risk of criminal exploitation.
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