JPMorgan Chase Becomes Major Shareholder in Star Entertainment

(Reuters) – U.S. bank JPMorgan Chase & Co (NYSE:JPM) has become a substantial shareholder in Star Entertainment, according to an exchange filing, amid the casino operator’s ongoing liquidity issues that have caused its shares to fall sharply in recent years.

JPMorgan now holds a 5.47% voting power in Star, as indicated in a filing on Thursday.

Star’s shares have been on a downward trend since 2022, facing multiple inquiries related to anti-money laundering violations, resulting in a nearly 50% drop in stock value this year. The shares fell 52% and 66% in 2022 and 2023, respectively.

As of 0055 GMT, Star’s shares were trading nearly 2% lower at A$0.255.

In its delayed annual results posted last week, Star indicated it might consider offloading assets for restructuring activities and addressing outflows due to regulatory matters. Additionally, the company’s corporate lenders have agreed to provide a new facility of up to A$200 million ($137 million), with an immediate A$100 million injection.

Earlier this year, Australian asset manager Perpetual also increased its stake in the financially struggling company. Before this, Star claimed that Hard Rock Hotels & Casinos was considering a bid; however, the Florida-based chain denied any involvement in a takeover bid.

The future of Star currently hangs in the balance as an inquiry revealed issues regarding its leadership and culture, deeming it unfit to operate its Sydney casino. Last week, Star responded to the New South Wales regulator’s show-cause notice, addressing its suitability to hold a casino license.

($1 = 1.4599 Australian dollars)