Star Entertainment extends $950m lifeline talks with Salter Brothers
Star Entertainment says it is locked in talks with financiers over a $950m lifeline that could allow the troubled casino group to avoid administration.
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Star Entertainment says it remains locked in talks with financiers over a $950m lifeline that could allow the troubled casino group to avoid administration.
Star said discussions with Melbourne-based investment firm Salter Brothers Capital over the refinancing would be extended to April 1 to allow the finalisation of the deal.
The company announced on March 7 that it was in exclusive talks about the refinancing proposal to ensure its long-term survival. At the same time, it revealed it was offloading its Queen’s Wharf property in Brisbane to its Hong Kong partners.
The extension of the talks signals that Star favours sealing the deal with Salter Brothers despite an 11th-hour rescue offer from US-based international casino group Bally’s Corporation that lobbed on March 10.
Bally’s, headed by New York hedge fund manager Soo Kim, is offering to recapitalise Star with $250m, under a deal in which it would take control of the company.
It its understood Star sees the Bally’s unsolicited offer as a positive because it underscores continued interest in the company, but it is unlikely to derail the Queen’s Wharf deal and the new refinancing proposal.
The US casino group would need to carry out due diligence before firming up its proposal, and there are questions over the level of its interest following the sale of the Queen’s Wharf asset to Star’s partners, Chow Tai Fook and Far East Consortium.
Wealthy publican Bruce Mathieson, who is Star’s biggest single shareholder, reportedly is leaning towards the Bally’s Corp offer.
Star said the Salter Brothers’ refinancing proposal, which had the potential to provide total debt capacity for the group of up to $940m, would if finalised provide the company with sufficient liquidity to refinance all its existing debt.
Star owes $430m to a syndicate of lenders and also faces a fine from anti-money-laundering regulator Austrac that could top $300m.
Should the Bally’s deal be given the green light, Star would still face money-laundering fines from Austrac.
If Star entered voluntary administration, Austrac would need to get in line with other creditors to be paid, as would shareholders carrying out a class action.
“The Star continues to work with Salter Brothers Capital (SBC) in relation to the refinancing proposal, and confirms that at the request of SBC, the exclusivity and process deed entered has been extended to April 1, 2025,” the company said in a disclosure to the ASX.
Star said SBC had advised that it was working towards making a binding offer of finance by March 31, which if accepted would be followed by a further period of exclusivity to enable preparation of the necessary documentation.
Star’s shares have been suspended since late February after it failed to deliver its half-year results, telling the market it was continuing “to explore possible liquidity solutions that might materially increase the group’s liquidity position.”
Star Entertainment reported losses of $1.69bn in 2024, after a loss of $2.44bn in the prior corresponding period.
Additional reporting: Bridget Carter
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Originally published as Star Entertainment extends $950m lifeline talks with Salter Brothers
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