Lenders Reject Covenant Waiver Requests Made by The Star During Negotiations

The Star Entertainment Group Struggles with Unacceptable Lender Terms

The Star Entertainment Group, Australia's largest casino operator, is facing financial challenges as it struggles to finalize its full-year accounts. The company has been unable to secure lender waivers to breach the terms of its debt agreements, with the proposed terms from the SFA lender group being unacceptable.

The SFA lender group, whose members are not publicly disclosed, proposed terms for the covenant waivers, but these terms were deemed unacceptable by The Star. The company has been in discussions about potential covenant waivers for September 30 and December 31, but these negotiations have yet to yield a favourable outcome.

The unacceptable terms proposed by the lenders prevent The Star from finalizing its full-year accounts. The company anticipates lodging unaudited accounts for the period ended 30 June 2025 on Friday 29 August 2025. The Star targets finalizing its audited accounts during September 2025 and lodging them with the ASX by 30 September 2025.

In an effort to alleviate its financial situation, The Star has reached an agreement to offload its 50% stake in Brisbane's Queen's Wharf casino to its Hong Kong-based partners for AUD 53 million. However, the planned sale of its interest in the Destination Brisbane Consortium (DBC) has fallen through.

The Star continues to rely on Bally's help, and the company had previously confirmed its reliance on its lenders' support under the Senior Facility Agreement. The waivers were requested to avoid penalties, but the refusal from the lenders has compounded The Star's financial troubles.

As of now, The Star's shares are trading at AUD 0.10 apiece. The Australian Financial Review reported that The Star's lenders, including Deutsche Bank, Macquarie, and Washington H. Soul Pattinson, refused to grant the waivers for a $430 million loan.

The company is currently in discussions with its lenders, and the outcome of these negotiations will be crucial for The Star's financial future. As the situation unfolds, investors and stakeholders will be closely monitoring developments regarding The Star Entertainment Group.