(Reuters) – Shares of Australia’s embattled casino operator Star Entertainment fluctuated sharply on Wednesday as trading resumed after the firm announced a larger-than-expected half-year loss. Star Entertainment’s shares opened 9% lower but recovered to jump more than 13% in their first day of trading since late February. Trading had been halted pending its half-year financial […]
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Australian casino operator Star swings sharply as trading resumes after weak results
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(Reuters) – Shares of Australia’s embattled casino operator Star Entertainment fluctuated sharply on Wednesday as trading resumed after the firm announced a larger-than-expected half-year loss.
Star Entertainment’s shares opened 9% lower but recovered to jump more than 13% in their first day of trading since late February. Trading had been halted pending its half-year financial performance.
The shares were last trading 2% lower at 10.75 Australian cents a share. It has lost more than 42% so far this year.
Stricter regulations and weak discretionary spending have pushed Star deeper in the red at a time when it is facing a massive liquidity crunch.
Last week, it agreed to an A$300 million ($190 million) rescue package from U.S. group Bally’s and major Star shareholders, the Mathieson family. In June, shareholders will consider approving a part of Bally’s investment, which will give the U.S. casino group control of 56.7% of Star.
“Star equity valuation will remain challenged, given significant levels of net debt,” Jefferies analysts said in a note on Tuesday.
They cut their price target on the stock to 9 Australian cents from 15 cents and retained the “underperform” rating.
The Australian casino operator reported a net loss of A$136 million in the first-half ending December 31, much steeper than the A$93.9 million loss in a Visible Alpha consensus.
($1 = 1.5760 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru; Editing by Mrigank Dhaniwala)