The Star Entertainment Group is close to handing over control of its operations to Bally’s as part of a rescue deal worth around A$300 million, according to The Australian Financial Review.
Last week, The Star Entertainment Group confirmed that Salter Brothers Capital had withdrawn its AU$940 million refinancing proposal, deepening concerns about the company’s already fragile financial position.
Sources say the agreement with Bally’s was approved by Star’s board and lenders over the weekend in an effort to help the troubled Australian casino operator avoid slipping into administration.
As part of the proposed deal, Bally’s would inject at least A$250 million into Star through convertible notes. If given the green light by regulators and shareholders, these notes could convert into a 50.1% controlling stake in the company.
An additional A$50 million is expected to come from Bruce Mathieson, Star’s largest shareholder, who currently holds about 10% of the company’s shares.
Star hasn’t publicly confirmed the deal yet, but AFR reports that the paperwork could be finalized as soon as today, April 7. A portion of the funds is expected to be transferred this week to help Star meet immediate financial obligations.
Despite progress on the deal, Star is reportedly pushing for a better valuation, arguing that the current offer doesn’t reflect the company’s full long-term potential.
Bally’s Chairman Soo Kim highlighted the strategic importance of keeping Star’s casino operations in Sydney, the Gold Coast, and Brisbane intact. He said the proposal would give Star greater operational flexibility and deliver value to stakeholders, adding that Bally’s is confident in its ability to turn around struggling casino assets based on its global experience.
