The Star Entertainment Group Ltd (ASX: SGR) share price has kept investors on edge since it was frozen from trading on August 28.
Currently locked at 45 cents, one big question overhangs the debate: Will the Star Casino share price tank once trading resumes?
If the casino operator's dire FY24 results are anything to go by, shareholders could be in for a rough ride. Let's take a closer look.
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Star share price to resume trading?
The Star Casino share price has been on ice for almost a month, but that doesn't mean the business has stopped operating.
In its FY24 results, posted on Thursday, the company revealed a large statutory net loss of $1.68 billion, largely driven by a non-cash impairment charge of $1.44 billion.
While it didn't physically lose $1.4 billion of cash, it had to write down the values of assets on its balance sheet at Sydney, Gold Coast, and Brisbane.
Star said it's been hit hard by tougher trading conditions. Revenue came in at $1.68 billion, whereas pre-tax earnings came to $175 million, in line with management's guidance.
Worse still, management said "trading performance deteriorated" in the second half, with losses continuing to pile up into FY25.
In July alone, Star posted a pre-tax loss of $6.6 million, followed by a further $1.1 million loss in August.
But it's not all doom and gloom. Star has secured a verbal commitment from its lenders for a $100 million cash injection, a critical piece of its five-point plan to stabilise its finances.
The rescue package includes additional loans, a push for duty relief in Queensland, and a plan to slash costs. As part of this, Star is also selling Brisbane's Treasury Casino for $67.5 million.
All told, if everything goes according to plan, the company could raise between $300 million and $350 million in total.
However, these rescue packages don't come cheap. The interest on Star's loans is expected to be a hefty 13.5% per annum. That's a stinger – and something that could impact the Star Casino share price.
Regulators not letting up: Bell Two
Financial woes aren't the only major concern for Star Casino shares, though. The company is also facing intense scrutiny from regulators.
Earlier this month, the New South Wales Independent Casino Commission (NICC) issued a 'show cause' notice in response to the Bell Two Report, which raised serious concerns about Star's suitability to hold a casino licence.
The NICC expects submissions from Star outlining how it intends to address the issues uncovered by the report and how it plans to stay afloat financially.
Star has until today to respond – and expects to do so by then.
Foolish takeaway
Whether the Star Casino share price tank when it finally resumes trading is debatable.
Given the company's $1.68 billion loss, the Bell Two report, and now, more debt, things aren't exactly looking rosy.
But we don't have a crystal ball. Star shares are down 25% in the twelve months to August 28.
