The Star Entertainment Group has announced that Salter Brothers Capital (SBC) has withdrawn its proposed AU$940M ($593M) refinancing plan, leaving the embattled casino operator exploring alternative solutions including a proposal from US gaming giant Bally’s Corporation.
The withdrawal comes after extensive negotiations with Salter Brothers Capital and relevant stakeholders, including state governments and regulators.
According to The Star’s stock exchange filing, specific conditions precedent to the refinancing proposal could not be satisfied within the timeframe needed to address the company’s urgent liquidity needs.
‘Lender requirements for specific priority arrangements and enforcement rights in relation to their proposed security over non-gaming assets of The Star could not be met,’ the company stated in its filing.
The collapse of the refinancing proposal marks a significant setback for The Star, which has been working to stabilize its financial position. The company’s shares have been suspended from trading since March 3rd, after the group failed to submit its half-year financial report for the period ended December 31st, 2024.
According to Australian media outlet Financial Review, people briefed on Star’s financial situation said the company had enough cash to run its operations for up to another week.
In its announcement, The Star confirmed it ‘continues to be unable to lodge its half year financial report for the period ended 31 December 2024 in the absence of an appropriate refinancing solution.’
The company is now actively engaging with Bally’s Corporation regarding an alternative proposal received on March 10th. Bally’s has offered to issue convertible notes that would be subordinated to The Star’s existing senior lenders, potentially convertible into a controlling 50.1 percent stake of The Star’s fully diluted ordinary shares.
As reported by AGB, in his letter to The Star, Bally’s Chairman Soo Kim emphasized the strategic nature of their proposal, stating, ‘We firmly believe that our approach—of new long-term capital plus operational track record—will unlock the best alternative for The Star and its shareholders.’
Bally’s has indicated its willingness to underwrite an entire AU$250M ($158M) capital raise while allowing existing shareholders to participate on a pro rata basis. The US casino operator highlighted its extensive experience managing 19 casinos across 11 US states and significant presence in international markets.
‘Our strategy for The Star is built on the simple premise that retaining the company’s current businesses, assets, and platforms will provide a stronger and more successful business over time,’ Kim wrote.
Despite these developments, The Star cautioned that ‘there remains material uncertainty as to the Group’s ability to continue as a going concern.’
The Star’s board is currently reviewing the Bally’s proposal but noted there is no certainty the offer will proceed further.
