A Macau-based investor, Xingchun Wang, has raised his stake in Australia’s embattled Star Entertainment Group, increasing his shareholding to 6.52% after purchasing an additional 28.7 million shares for AU$3.16 million ($1.96 million) in the past 24 hours. This move makes Wang one of the largest shareholders in the casino operator as it faces significant financial challenges.
Wang first appeared on Star Entertainment’s shareholder register in September 2023 and became a substantial holder last week. With the recent acquisition, his holdings now amount to approximately 187 million shares, valued at over AU$26 million ($16.10 million) at the current market price of AU$0.14 ($0.087) per share.
However, the total cost of his investment since October exceeds AU$38 million ($23.53 million), leaving Wang with an unrealized capital loss of around AU$12 million ($7.43 million) due to Star’s declining share price.
The investor has previously paid as much as AU$0.259 ($0.16) per share but recently took advantage of a record low price of AU$0.10 ($0.062). Wang’s consistent purchases seemingly highlight his confidence in the company, despite its struggles, including a net cash burn of AU$70 million ($43.34 million) in the final quarter of 2024.
Star Entertainment’s cash reserves have dwindled to AU$79 million ($48.91 million), and the group is grappling to secure the second tranche of an AU$200 million ($123.82 million) debt facility arranged in late 2024. The company has acknowledged it is actively seeking additional liquidity solutions to maintain operations.
Wang’s investment comes amid mounting speculation about Star’s financial stability. Morningstar analyst Angus Hewitt estimates a 50% likelihood that the company could enter administration. “At the current cash burn, the company would be lucky to make it to its interim results on February 28 without a lifeline,” Hewitt noted.
In addition to Wang, global financial institution JPMorgan Chase has also recently increased its stake in Star, raising its holding from 5.05% to 6.34% after acquiring shares during a period of sharp price declines.
Star’s constitution, in alignment with Australian casino regulations, prevents any individual shareholder from holding more than 10% voting power. Nonetheless, Wang’s growing position has drawn attention as market observers speculate on the motives behind his continued investments.
Wang’s shares are registered to a Macau address, and reports suggest he shares a name with a businessman connected to a Hong Kong-listed coal group. While the exact nature of his intentions remains unclear, his investments come at a precarious time for Star.
Original article: https://www.yogonet.com/international/news/2025/01/14/91813-macau-investor-becomes-major-shareholder-in-struggling-star-entertainment
