(Bloomberg) -- Star Entertainment Group Ltd. has been given 14 days to reveal the state of its finances and lay out a rescue plan for its flagship Sydney casino, starting the clock on the future of the struggling Australian company.
An inquiry’s report late last month found Star remained unfit to operate the casino, hamstrung by inaction, dysfunctional leadership and questionable ethics. The probe identified four significant breaches of the company’s gaming license. The regulator is yet to issue its formal response.
The New South Wales Independent Casino Commission on Friday served Star with a so-called show cause notice, asking the company to explain why it shouldn’t be punished. The commission’s options include canceling Star’s license in Sydney, issuing a A$100 million ($67 million) fine or changing the terms of the casino license.
The demand piles more pressure on Star’s new Chief Executive Officer, Steve McCann, as he races to lock in funding to support his turnaround plan and finance Star’s new casino resort in Brisbane, Queensland. Even if Star escapes the worst punishment of all — losing its license in Sydney — the company’s future looks set to be full of extra compliance costs and oversight as it tries to prove it’s financially and culturally worthy of running the casino.
In a separate statement on Friday, Star said it’s still in discussions with lenders, state governments and regulators about its financial position. The talks have delayed Star’s results for the year ended June 30 — due last month — and Star stock hasn’t traded since the scathing regulatory report was released.
The shares had slumped more than 50% in the preceding year, slashing the company’s market value to A$1.3 billion.
Star said the NICC asked for information about the company’s current and future finances so it can assess Star’s financial suitability to run a casino. Star said it plans to respond by Sept. 27.
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