The Star Entertainment Group’s financial crisis has taken another blow after the company confirmed it was unable to negotiate covenant waivers with its lenders.
In a filing to the Australian Securities Exchange (ASX), The Star addressed reports from the Australian Financial Review which claimed that its lenders — including Deutsche Bank, Macquarie, and Washington H. Soul Pattinson — refused to provide waivers on a A$430 million ($280.7 million) loan. Such waivers would have allowed the group to breach certain debt covenants without triggering default penalties.
The Star confirmed that discussions had taken place regarding covenant waivers for 30 September and 31 December. However, the company said the proposed conditions by lenders were “unacceptable,” adding, “The Company currently anticipates that on Friday 29 August 2025, it will lodge with the ASX unaudited accounts for the period ended 30 June 2025. The Company is targeting finalisation of its audited accounts during September 2025 and lodgement with the ASX by 30 September 2025.”
Mounting financial and regulatory pressure
The casino group’s troubles began after a series of regulatory probes in New South Wales and Queensland that severely damaged investor confidence and revenue streams. Its market capitalisation has now collapsed, with shares trading at just AUD 0.10 apiece.
Adding to its woes, The Star recently revealed that the proposed sale of its stake in the Destination Brisbane Consortium (DBC) collapsed, further limiting its ability to raise much-needed funds. The company did, however, manage to strike a deal to sell its 50 stake in Brisbane’s Queen’s Wharf casino to joint venture partners Chow Tai Fook Enterprises and Far East Consortium for AU$53 million. According to local media reports, the transaction, will see AU$45 million—originally paid in March before negotiations collapsed—reinstated as part of the revived deal.
For the past months, Star has been under mounting financial strain due to strict regulatory measures, declining tourism, and rising living costs. The company has been working to reduce its debt load, much of which was incurred during the redevelopment of the Brisbane property. The sale will enable Star to exit its involvement in the Brisbane resort, while retaining rights to future developments at its Gold Coast operations and acquiring a two-thirds ownership stake in two hotels currently under construction there.
The transaction will also mean Star avoids having to fund further equity contributions to the Queen’s Wharf project, which were estimated at over AU$200 million. Additionally, the company will be released from its guarantee on half of the project’s debt facility.
Future hinges on Bally’s support
For now, The Star is relying heavily on the backing of Bally’s Corporation. The AU$300 million funding package comprises a multi-tranche convertible note and subordinated debt instrument, split between Bally’s Corp and Bruce Mathieson’s Investment Holdings. Bally’s will contribute AU$200 million while Investment Holdings will be investing AU$100 million to the Star. The company hopes that strategic partnerships and asset sales will buy the casino giant time to stabilise operations.
