Star Entertainment Group has taken a significant step to stabilize its operations by invoking safe harbour provisions. This legal measure protects company directors from personal liability in case of insolvency and gives creditors a stronger say in decisions, allowing Star to navigate its ongoing financial difficulties without risking leadership exposure to litigation.

With casinos in Sydney, Brisbane, and the Gold Coast, Star has been facing escalating financial strain. Recent reports revealed that the company burned through approximately $107 million during the December 2024 quarter, leaving only $79 million in unrestricted cash reserves, according to the Financial Review. Despite securing a $200 million loan in September 2024, only half of the funds have been disbursed, and the remainder is contingent on raising additional capital.

Government Support and Investor Interest

Star’s CEO, Steve McCann, has reiterated calls for tax relief from the New South Wales and Queensland governments. He stated, “We are making good progress with our remediation plans; we’re looking at all options through our business restructure to retain the vast majority of frontline jobs. We need time to reset the business.” However, government sources have indicated reluctance to provide tax concessions and are instead preparing contingency plans should Star fall into administration.

A notable development during this turbulent period is Macau businessman Xingchun Wang’s increasing stake in Star. Wang recently acquired 28 million shares, raising his ownership to 6.52%, according to Sky News Australia. His investment has helped boost Star’s share price by 27%, though it remains far below its 2018 peak of over $5. Moreover, JP Morgan, the famous American financial company, decided to end its stake in Star Entertainment at the end of last year.

Financial Challenges and Remediation Efforts

Star’s financial troubles are compounded by penalties related to breaches of anti-money laundering and counter-terrorism laws. The company has allocated $150 million for a potential fine from AUSTRAC. Additionally, remediation efforts, including the introduction of carded play systems that require identification for poker machine use, have proven more costly and complex than anticipated. McCann acknowledged that the remediation plan had to be revised multiple times due to previous shortcomings and the technological challenges of implementing these solutions.

The company’s safe harbour status offers temporary relief but requires approval from creditors for key decisions, including requests for further government assistance. Star has enlisted FTI Consulting as its advisor to navigate this phase. While the safe harbour provisions shield the board from insolvency-related liability, they do not prevent the possibility of administration if a viable restructuring plan cannot be secured.

Outlook Amid Uncertainty

Star’s operations remain under regulatory supervision, with government-appointed managers overseeing its Sydney and Queensland casinos since 2022. These measures followed inquiries that revealed alleged links to money laundering and organized crime. Despite the challenges, McCann emphasized the company’s ongoing transformation efforts, although he acknowledged the significant costs associated with external advice and restructuring initiatives.

With cash reserves dwindling and no immediate relief in sight, Star’s financial stability hangs in the balance. The company continues to seek alternative funding options, including an additional $100 million loan to address short-term pressures, while stakeholders and investors remain watchful of its next steps.