Star Entertainment Considers Refinancing amidst Gambling Scrutiny

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Leading Australian casino operator Star Entertainment has requested its shares to be placed in a trading halt until Wednesday following a financial decline caused by increased regulatory scrutiny within the national gambling sector.

These regulatory measures have had a significant impact on the company's financial stability, leading to a review of its financial approach. According to the Australian Securities Exchange, Star had imposed the share trading suspension pending an announcement regarding the financing of its balance sheet and related capital structure initiatives.

Additionally, the trading halt follows a Sunday report by the Australian Financial Review stating that the company was preparing to secure up to A$750 million ($483 million) in fresh capital through equity raising and an additional A$450 million in new debt. These moves align with Star Entertainment's overarching strategy to strengthen its financial position amid the ongoing regulatory crackdown on the gambling industry.

Related: The Star Entertainment Group Draws Heavy Criticism at Inquiry

Potential Rise amidst Australian Gambling Industry Changes

The heightened scrutiny in the Australian gambling industry has led to notable changes within the sector, with operators like Star Entertainment Group Ltd. implementing measures to address potential financial risks and uphold compliance with regulatory standards.

Star has had to shut its casinos to more customers and incure increased compliance costs, all while discretionary spending has decreased. The company also reduced its workforce by more than 500 employees and reported net loss of A$2.44 billion in the last fiscal year. Star’s shares were also hit, plunging over 44% to reach an all-time low this year.

However, the proposed equity deal has the potential to make Star the largest holder of Australia’s market share this year. The company had previously raised A$685.5 million in equity in February, trailing only the A$895 million accelerated non-renounceable entitlement offer from packaging firm Orora Ltd., earlier in the month to finance its acquisition of French bottle maker Saver glass.

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