Entertainment

Star Entertainment jumps a day after Sydney casino relief

By Rishav Chatterjee

(Reuters) – Troubled Australian casino operator Star Entertainment gained on Friday after it resumed operations a day after the New South Wales state gaming regulator said the troubled company could keep its Sydney casino open.

The New South Wales Independent Casino Commission decided on Thursday not to revoke the company’s license to operate in Sydney, but allowed it to continue operating with a minor fine of 15 million Australian dollars ($10.04 million).

The company’s shares rose as much as 5.2% to A$0.305 in early trading, hitting their highest level since late September.

The debt-laden gaming firm has been in the eye of a perfect storm that has hit Australian casino operators for years, with Crown Resorts, its larger rival, owned by Star and Blackstone, having been embroiled in multiple regulatory inquiries amid reduced tourist visits and prolonged closures.

“Star still needs to prove its suitability to operate its casinos, a substantial fine from AUSTRAC is looming and the recovery of profits is highly uncertain,” Morningstar equity analyst Angus Hewitt said.

Under the changes required by Philip Crawford, the Independent Casino Commissioner, the company will have to restructure its board and provide financial updates at regular intervals while being under the control of a government-appointed manager until at least the end of March.

In the recent past, Star’s board and management team were hit by two Bell investigations, lost their CEO and president, and nearly went bankrupt. However, last month the company secured a debt lifeline of up to A$200 million ($133.92 million) to revamp its operations.

The state of New South Wales launched its first investigation into Star two years ago and found the company had misled its bankers and the regulator. A subsequent investigation by Adam Bell, SC revealed how the company had an increasingly deteriorating relationship between the board of directors and various stakeholders.

($1 = 1.4934 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Alan Barona)

‘ finance.yahoo.com ‘

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