It’s been a pretty disappointing day for ASX shares and the ASX 200 Index so far this Wednesday. At the time of writing, the ASX 200 has slipped by 0.31% to under 7,315 points. But one ASX 200 share, perhaps mercifully, is sitting this session out. That would be the Star Entertainment Group Ltd (ASX: SGR) share price.
Yesterday, this ASX 200 casino operator and gaming company closed at $1.52 a share. And that’s where it will be staying, at least for a while. This is due to Star announcing a trading halt for its shares this morning before market open.
Yes, in an ASX release today, Star announced that its shares would be put on ice.
Why?
Star share price on ice as capital initiatives announced
Well, Star Entertainment has told investors that “the Trading Halt is necessary as The Star expects to make an announcement to ASX regarding capital structure initiatives“.
As such, the shares will remain halted until either 24 February or until “such time as The Star releases an announcement to ASX in relation to the capital structure initiatives”.
And that’s all we know for now.
Of course, the Star share price has had a truly awful month. Back on 13 February, the company released an earnings and guidance update which spooked investors mightily.
Star told the markets that it is anticipating a non-cash impairment charge of between $400 million and $1.6 billion in its half-year results, depending on the impact of the proposed changes to New South Wales casino duty.
It also declared that it is expecting to report full-year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) between $330 million and $360 million.
Investors were not impressed, to say the least. On the day this guidance came up, the Star share price cratered by a horrendous 20.74%, and lost another 13.4% the following day too, reaching a record-low share price of $1.28 in the process:
Until yesterday, the Star share price had recovered somewhat from these lows. But it will interesting to see what investors make of this latest announcement. Or indeed exactly what kind of “capital structure initiatives” Star has up its sleeve.
The post Why is the Star Entertainment share price on ice today? appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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