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Casino group Star Entertainment hits record low on equity raising plans

By Rishav Chatterjee

(Reuters) - Shares of Australia's Star Entertainment Group touched a record low on Wednesday, as they resumed trading after the casino operator announced its plans to raise A$750 million($480.23 million) to undergo a capital restructuring.

The cash-strapped company said on Monday it would raise capital at 60 Australian cents per share, a 20% discount to the stock's closing price last Friday.

Star Entertainment shares, which were on a trading halt since Monday, fell as much as 19.7% to an all-time low of A$0.603 as of 0212 GMT.

"Star is a textbook example of how not to run a casino," said Tony Sycamore, markets analyst at IG Australia.

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"The destruction of shareholder wealth in a business which should be profitable in all weather conditions is simply jaw dropping."

The equity raising is in line with a previous rescue effort the company had made in February when it tapped the market of A$800 million in a bid to rescue its balance sheet.

Star said in a statement on Monday it would also take on A$450 million of new debt provided by Barclays and Westpac, and its existing debt will be repaid and cancelled following the capital restructure.

"Overall, there is pessimism all over the business, with revenue recovery and future profitability in serious doubt," said Jessica Amir, market strategist at Moomoo.

($1 = 1.5618 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Rashmi Aich)