Australia’s Star Entertainment Group has been handed a reprieve by its lenders after they signed this week a covenant waiver for 30 September 2025 in relation to its AU$450 million (US$297 million) syndicated facility agreement.
Releasing its audited financial report for the year ended 30 June 2025 on Tuesday, Star confirmed that the parties have exchanged signed documentation to give effect to the covenant waivers for the 30 September testing period – providing it with additional time to lock in a raft of liquidity measures ahead of the next testing date of 31 December 2025. The company did, however, state that should it be unable to secure future required waivers – including for 31 December – the Group would need to execute a refinancing of the syndicated facility agreement within the available timeframes to avoid a default.
Notably, Star’s audited financial results included some gains compared with the unaudited results the company released in late August after it received additional information that impacted its tax position. As a result, statutory loss after tax narrowed from AU$471.5 million (US$312 million) previously to AU$427.9 million (US$283 million) while net assets as of 30 June 2025 grew from AU$403.2 million (US$267 million) to AU$446.8 million (US$295 million).
Despite this, Star said there continues to be “numerous material uncertainties in existence that cast significant doubt as to the Group’s ability to remain a going concern” given its current net liability position of AU$426.3 million (US$282 million) and available cash of just AU$163.5 million (US$108 million) as of 26 September 2025.
This, the company observed, remains insufficient to meet the current net liabilities – even though the liabilities include a provision based on directors’ estimates for a pending fine that is set to be handed down by anti-money laundering watchdog AUSTRAC over historical compliance failures. AUSTRAC is seeking to levy a fine of around AU$400 million (US$264 million) while Star has told the federal court that any fine greater than AU$100 million (US$66.1 million) if payable in the next 12 months would be challenging based on available liquidity options.
On the topic of going concern, Star added that its directors believe there are reasonable grounds to believe the Group will be able to meet its liabilities as and when they fall due over the next 12 months and to continue to remain a going concern, provided that certain factors play out in its favor.
These, it outlined, include that the AUSTRAC fine is not “of such a magnitude, nor of such timing, that it would render the Group unable to pay its debts as and when they fall due”; that it continues to gain the support of existing lenders; that it receives regulatory approvals for the AU$300 million (US$198 million) strategic investment recently received from Bally’s Corp and Investment Holdings Pty Ltd; and that it completes its exit from the Destination Brisbane Consortium in a timely manner, among other factors.
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