Star secures a lifeline but the future of the casino giant is far from assured

ABC NEWS (Australia)

The troubled owner of Sydney's Star Casino has been rescued. After failing to release its financial results a month ago and being suspended from the stock exchange, Star Entertainment has finally secured a deal with lenders.

Transcript

00:00It's taken a month of intense negotiations, but Star Entertainment Group has finally secured

00:07itself a lifeline.

00:09Its bankers have agreed to tip in an extra $200 million to keep the operation afloat.

00:15But it comes with an expensive price tag, 13.5% interest.

00:20That's about double a normal home loan interest rate.

00:22There was a last minute hitch, however, when the Queensland Government refused to provide

00:26support after New South Wales had already backed away.

00:29There's been no agreement whatsoever reached there, and we're unlikely to reach one.

00:34Frankly, I find it astounding that they would be asking the state to defer taxes, to delay

00:40the payment of taxes, while paying themselves performance bonuses.

00:44We're going to put the taxpayers of Queensland ahead of those executives.

00:48The company's financial results were released today, almost a month late, and they were

00:52a sea of red ink.

00:54Losses blew out to almost $1.7 billion after huge write-downs on the value of its Brisbane

01:00casino at Queens Wharf, and smaller write-downs in Sydney and on the Gold Coast.

01:05Little wonder then that nervous directors recently considered calling in administrators.

01:10Tomorrow, the casino group's new management will have to explain to regulators why they

01:14should be allowed to keep operating.

01:17That follows a second inquiry, which found them unfit to hold a licence.

01:22When the shares resume trading tomorrow, big falls are expected.

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