The Sydney-based exchange issued the announcement on Monday morning after Star failed to publish its annual financial report by last Friday’s (31 August) due date. These issues led to the suspension of its half-year financial statements, a brief trading halt in February, and its shares being suspended from the ASX in March. At one point, the company reportedly had only AU$79 million in cash, enough to stay afloat for just one more week.
Morningstar lowers our Uncertainty Rating from Extreme to very high after the results of the second bell inquiry were passed down. The scrutiny into Star’s suitability to hold a casino licence ended in the best plausible outcome that the company could have hoped for. Whilst they are currently deemed unsuitable to hold a casino license, the enquiry ruled that the license need not be revoked entirely. Queensland is currently the only state where Star holds an exclusive position and consequently the company is throwing substantial amounts of capital (~$3 billion) in ensuring it stays that way. The Queen's Wharf joint venture development in Brisbane commands $2.6 billion of the spending with a 99-year lease and 25-year exclusivity period. Morningstar expects the extensive capital investment in Queensland to weigh on the near-term returns on invested capital.