Bally’s Corporation makes a $250m rescue bid for Star Entertainment

The man behind an 11th hour $250m rescue bid for Star Entertainment is a self-described “corporate fireman” who companies call when they get into trouble.

Queen's Wharf in Brisbane where thousands of workers could potentially lose their jobs if The Star can't find more backing.

US casino group Bally’s Corporation has made an unsolicited, non-binding rescue proposal that will pump a minimum $250m into The Star Entertainment Group that is teetering on the edge of collapse.

The Board of Star said it will review Bally’s proposal, however it told the ASX there was no certainty the 11th hour bid would be successful.

The offer from the Rhode Island-based gambling, betting and entertainment company also opened up the possibility that its expertise in turning around failing casinos would be deployed to save the debt-ridden Australian operation.

Soo Kim, the man behind the US casino giant, is a self-described “corporate fireman” who companies call when they get into trouble.

Bally’s Corp now owns and operates 19 casinos in the US as well as operations in the UK with about 17,700 slot machines, 630 table games, and 3950 hotel rooms.

The Star on Monday confirmed the proposal and said Bally’s would provide “a capital raise of at least A$250m, pursuant to which The Star would issue convertible notes subordinated to The Star’s existing senior lenders.”

“The convertible notes would be convertible into at least 50.1 per cent of The Star’s fully diluted ordinary shares,” it said.

“Bally’s would underwrite the entire amount of the capital raise, but would be supportive of providing The Star’s existing shareholders the right to participate in a significant portion of the offering on a pro rata basis.”

Bally’s Corporation has made an unsolicited, non-binding rescue proposal that will pump a minimum $250m into The Star Entertainment Group.

The Queensland government is expected to green light Star Entertainment’s sale of its stake in the $3.9bn Queen’s Wharf casino precinct to its Hong Kong partners.

Star Entertainment’s exit from the Brisbane market will give it at least a few months of breathing space while it finalises a long-term debt restructuring plan for its remaining operations on the Gold Coast and Sydney.

The company owes $430m to a syndicate of lenders and faces a huge fine from anti-money laundering regulator Austrac that could top $300m. Star announced Friday it was seeking access to more than $1bn in financing to shore up its liquidity.

Originally published as Bally’s Corporation makes a $250m rescue bid for Star Entertainment