Published on: December 23, 2024, 01:27h.
Last updated on: December 23, 2024, 01:27h.
JPMorgan Chase & Co. (NYSE: JPM) has divested itself of its investment in Star Entertainment, the Australian casino operator.
A filing with the Australian Securities Exchange (ASX) confirmed the bank’s recent liquidation of its stake in Star, with both companies confirming the transaction.
As required under Listing Rule 3.19, The Star Entertainment Group Limited (Company) gives notice that it has become aware that JPMorgan Chase & Co. and its affiliates ceased to be a substantial shareholder of the Company on 18 December 2024,” according to the Star regulatory document.
An October filing with Australian securities regulators revealed that the bank had acquired 5.47% of the gaming company’s voting equity. This news followed Star’s removal from the Australian Stock Exchange (ASX) for not releasing financial results as scheduled. Star is the largest publicly traded casino operator in Australia.
Star Entertainment’s Challenges
No specific reason was provided by JPMorgan for its swift divestment from Star Entertainment. However, the gaming company is facing several challenges.
Similar to Crown Resorts, Star has faced regulatory scrutiny. It is also dealing with declining earnings and a liquidity crisis. In September, the casino operator informed investors that it may consider selling assets to raise funds.
Under a prolonged anti-money laundering investigation, Star risks losing control of its flagship venue, The Star Sydney, which has been under government control since 2022. The company’s other venues, The Star Brisbane and The Star Gold Coast, are also government-run.
Earlier this month, Star Entertainment disclosed that a hearing on the suspended license for The Star Gold Coast was postponed until March 31, 2025, and the appointment of a special manager for the casino hotel was extended to June 31, 2025.
“The Star has also been advised that it is expected to take swift action to address the relevant significant outstanding remediation matters referred to above and that the Commissioner for Liquor and Gaming Regulation will review The Star’s progress in February 2025,” according to the filing.
The Future of Star Entertainment
With JPMorgan’s abrupt exit from its investment in Star Entertainment without explanation, some market participants may view this as a negative signal for the company’s outlook.
While Star and Crown could enhance investor confidence by resolving long-standing regulatory issues, they also face challenges due to a decline in Chinese clientele who are opting for Macau or Singapore instead.