Executive bonuses create a sticking point in Star rescue deal with Queensland government
The Queensland Premier Steven Miles confirmed earlier this month that his government was negotiating a possible deferral of tax payments to protect almost 3000 jobs at the recently opened Queen’s Wharf complex in Brisbane.
The Australian understands that a sticking point is the Queensland government’s insistence that no bonuses are to be paid to Star executives until the relief is paid back in full.
If a deal is reached, Star will have to pay interest owing when it eventually pays the deferred tax.
NSW appears to have cold-shouldered an approach by Star for help, saying it was the responsibility of Star to maintain the financial viability of its business.
The New South Wales Independent Casino Commission (NICC) issued a show cause notice against Star earlier this month that could result in a $100m fine and the loss of its Sydney casino licence.
The NICC wants a response as to why it should not take disciplinary action against Star in respect of breaches substantiated in the Bell II report, which included failure to run source of wealth checks on hundreds of members flagged as high risk, and fraudulent guest welfare entries which put already vulnerable customers at higher risk of harm.
Star said it expects to respond to that notice by this Friday.
ButThe Australian’s Data Room columnwrote earlier this week that Star is likely to delay the announcement of its refinancing plan.
The initial plan was for new funding to be announced on Wednesday and for the stock to resume trade on Friday.
Star has managed to create some breathing room with its lenders committing to $100m in a fresh funding deal. It is understood that comes after banks that had been providing a $150m working capital facility prohibited the company from drawing down any more of the funds. Some $30m has already been accessed.
The new $100m loan will probably come at a higher cost but the burden is likely to be spread among a larger pool of lenders, and a further $100m may follow, subject to conditions such as an equity raising.
Star also has a $300m term loan with a syndicate headed by Macquarie and Deutsche Bank and including Barclays, Soul Patts and Regal and ARCM.
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