Star Entertainment sells Sydney Event Centre and related assets for $37.5M to raise cash

2025-01-30

Australia

Reading time 1:48 min

Australia's Star Entertainment is selling assets to raise cash as at least one money manager eyes purchases of the gaming company’s debt. In a Wednesday filing with the Australian Securities Exchange, the embattled operator announced the sale of The Star Sydney Event Centre and related assets to Foundation Theatres for $37.5 million.

The move seeks to provide Star with some time to ward off insolvency. Earlier this month, Morningstar analyst Angus Hewitt speculated that with its current burn rate, the casino company could run out of cash and become insolvent before it delivers financial results in February.

"The Star has worked closely with the team at Foundation Theatres since they acquired the sublease for the Sydney Lyric in 2011. We are pleased to partner with them as part of the continued evolution of our broad entertainment offerings at The Star Sydney," said Star CEO Steve McCann in the regulatory filing.

He added the operator is working on other “non-core” transactions, but he didn’t go into specifics.



Steve McCann

News of the sale of the Sydney event center emerged a day after it was reported that Cerberus Capital Management is talking with Star lenders about acquiring some of the AUD 400 million ($249.1 million) in debt owed by the gaming company.

Rumors indicate those creditors, which include Barclays, Deutsche Bank, Soul Pattts, and Westpac, among others, have little confidence that Star can remediate its position or that the asset sales will be enough to keep the company afloat. As a result, they could be inclined to sell the gaming company’s debt for pennies on the dollar before it loses all value.

The Australian Financial Review reported that New York-based Cerberus Capital has been contacting those creditors about buying Star liabilities, but the money manager hasn’t publicly confirmed those overtures. Cerberus is an alternative asset manager with $65 billion in capital under management across the credit, private equity, and real estate spaces. The company has two offices in Sydney.

In terms of non-core assets Star could sell to raise cash and extend its lifespan, the Gold Coast Convention and Exhibition Centre (GCCEC) in Broadbeach could fit the bill because it’s not a gaming venue, but recouping the AU $167 million spent to build the property could be difficult because prospective buyers would have leverage over the seller.

As for selling gaming venues, something Star has not yet said it will do, that could be a tougher task because The Star Sydney has been run by the Australian government since 2022 and Star could lose full control of that integrated resort.

Likewise, The Star Brisbane and the Star Gold Coast are also run by the government, implying there are potential regulatory complexities that potential suitors could face, making transactions unappealing.