Macau-based investor increases stake in Star Entertainment amid financial struggles

Star Entertainment’s financial woes have taken a curious turn as Macau-based businessman Xingchun Wang increased his stake in the company for the second time in a week.

Wang, who reportedly became the second-largest shareholder, now owns nearly 7% of the struggling casino operator after spending over AUD38 million on shares.

This comes as Star warned last week that it could collapse within weeks without securing additional financing.

Wang initially acquired a stake in Star in September, investing around AUD13 million (around MOP64 million).

Despite his growing influence, Star has not disclosed whether it has contacted him or understands his intentions.

As cited in multiple media reports, sources close to the company suggest Wang may be linked to large stakes in resource firms and could be connected to E-Commodities Holdings, a Hong Kong-listed coal trading business led by his daughter, Amy Wang.

Under casino regulations, individual shareholders cannot own more than 10% of Star without gaming regulator approval.

Combined with holdings by Far East Consortium International and Chow Tai Fook Enterprises, Wang’s stake could help the trio control up to 20% of the company, according to a report by the Australian Financial Review.

Star, which operates casinos in Sydney, Brisbane, and the Gold Coast, has faced mounting financial strain due to declining patronage, high debts, and substantial regulatory fines.

The company reported just AUD79 million in cash as of December 31, after burning through AUD100 million in the previous quarter.

Regulators are expected to impose more than AUD300 million in fines on Star for money laundering failures, including concealing a criminal gang-linked junket operator and allowing it to run a secret gambling room.

With AUD330 million in loans due for covenant tests by March and June, and AUD1.6 billion in debt tied to the Queen’s Wharf development needing refinancing next year, lenders are increasingly concerned about Star’s viability.

To raise funds, Star has offloaded assets, including a Gold Coast hotel for AUD192 million and its leasehold interest in the Treasury Brisbane casino building for AUD67.5 million. However, efforts to sell additional properties, including Treasury’s accompanying hotel and car park, have faltered.

Angus Hewitt, a Morningstar analyst, warned last week that Star’s situation is dire, estimating a 50% chance of administration without immediate intervention.

“At the current cash burn, the company would be lucky to make it to its interim results on February 28 without a lifeline,” he wrote.