Star Entertainment was putting the finishing touches to a...

Star Entertainment was putting the finishing touches to a comprehensive capital restructure on Sunday night, which is expected to include a $750 million equity raising, Street Talk can reveal.

It is understood the cash call, to be managed by Barrenjoey Capital Partners and launch as early as Monday, will be accompanied by a $450 million debt package backed by Westpac and Barclays.

Star Entertainment boss Robbie Cooke. Louie Douvis

The raise and debt package would eliminate Star’s existing loans, which were part bank debt/part US private placement bonds, sources said.

Star’s accounts, released in late August, recorded a weak financial performance, and showed a company whose operations were barely bringing in enough cash to pay the bills. The year to June 30 was the worst in Star’s history.

The result was staggering; a $2.44 billion loss, mostly thanks to the $2.17 billion written off the value of its casinos, which flowed through to a much smaller asset base. It had only $43.8 million in cash flow from operating activities, down from $176.2 million in the much quieter (for casinos) 2022 fiscal year. The main numbers were all by far the worst since Star was spun out of Tabcorp and listed on the ASX in June 2011.

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SGRThe Star Entertainment Group

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The capital refresh is expected to not only eliminate Star’s hefty debt load, but fund costs associated with Queen’s Wharf in Brisbane, one of Star’s two big development projects under way, with the other being Tower 2 in Gold Coast.

Star has estimated Queen’s Wharf’s project costs would be $2.9 billion. It has been a dispute with the builder, Multiplex, which has delayed construction. Multiplex, recently moved the Supreme Court of Queensland to seek declarations and orders regarding timeline extensions, milestone dates, liquidated damages and variations. Star and Destination Brisbane Consortium (DBC) planned to defend the claims.

It is now slated for a phased opening from April 2024.

“Failure to realise the potential return from the group’s invested capital in the Queen’s Wharf Project or The Star Brisbane, or a failure to obtain the necessary licences or approvals to operate the precinct, may have an adverse impact on the group’s reputation, financial performance and position,” it said in its accounts for the 2023 financial year.

Star is waiting to hear on its AUSTRAC fine, after the watchdog alleged the casino operator allowed money laundering to take place at its casinos while trying to bring in high-spending gamblers.

In its most recent accounts, the provisions included $423 million for regulatory and legal matters including fines issued by the NSW Independent Casino Commission and Office of Liquor and Gaming, underpaid casino duty in NSW, and of course, the AUSTRAC civil penalties.

Street Talk previously reported that Oaktree Capital Management was working with Bain Capital on a proposal. Oaktree has had several attempts at the local casino sector. The alternative asset manager spent weeks discussing potential funding plans with Star and exploring structures that would have resulted in it injecting hundreds of millions of dollars in equity into the embattled casino giant. In the end, Star decided to go in a different direction, raising money from investors including Bruce Mathieson, whose wealth sits at $2.13 billion, according to the Financial Review Rich List.