Australian gaming operator The Star Entertainment Group has secured at $390 million refinancing agreement with WhiteHawk Capital, along with a minimum liquidity provision framework to help the group meet conditions with its current lenders.
According to a Monday release by the group, Star and WhiteHawk have ‘entered into a binding commitment letter’ which ‘provides for a refinance of existing Group debt in full and incremental liquidity to retain sufficient liquidity for ordinary course of operations’.
The move comes after The Star in early March indicated that there was ‘material uncertainty regarding the Group’s ability to continue as a going concern’.
The Star initially entered into a non-binding agreement with US-based WhiteHawk Capital Partners in late February to support the company’s turnaround, with WhiteHawk investors being given a tour of The Star’s operations in Australia in March to help secure a commitment.
The Star had indicated it was initially hoping to have a binding commitment by the end of March and to ‘consummate the Refinancing Proposal by mid-May’.
Refinancing and liquidity
Under the terms of the new agreement, the refinancing is subject to a three-year term, with a ‘quantum of $390 million’ subject to an annual interest rate plus ‘a margin that is materially consistent with the Company’s recent facility agreements.
The agreement also provides a minimum liquidity covenant of AU50 million ($34.3 million) for the first 12 months after financial close, increasing to AU$75 million ($51.4 million) for the following six months and AU$100 million ($68.54 million) after the first 18 months.
The agreement assumes quarterly amortization commencing March 31st, 2028, with a minimum asset coverage ratio commencing December 31st, 2026, and a minimum EBITDA covenant commencing from March 31st, 2027.
It also mandates ‘customary covenants, representations, events of default and review events, including customary financial covenants and reporting obligations’.
The Star indicates that it is ‘working expeditiously to complete the Refinancing by no later than 15 May 2026 in order to satisfy the conditions of the waiver given on 27 February 2026 to the Group by its existing senior lenders’.
Major reforms
The refinancing agreement comes after a AU$300 million ($211.77 million) lifeline investment by Bally’s Corporation and Investment Holdings last year, giving Bally’s 38 percent of The Star’s issued capital and Investment Holdings 23 percent.
The move was followed by a board overhaul, with Bally’s Chairman Soo Kim installed as Chairman and Bruce Mathieson Jr coming on as Group CEO.
Recently, the group has also appointed former Caesars executive John Koster as CEO of The Star Sydney and former Tabcorp exec Dave Whimpey as interim CEO of The Star Brisbane.
The Star is also working to significantly cut costs and shift corporate responsibility to the property level by closing its corporate office and reducing its workforce.
The group is still in the process of exiting its joint venture with Chow Tai Fook Enterprises (CTFE) and Far East Consortium International (FEC) for Queen’s Wharf Brisbane. The exit from the Destination Brisbane Consortium (DBC) joint venture is still dependent on the group being released from its parent company guarantee of approximately AU$700 million ($500 million) in drawn debt for the DBC project by its JV partners.
When announcing its non-binding agreement with WhiteHawk in February, The Star indicated that it was not contingent on the current AUSTRAC case against The Star.
The Australian Transaction Reports and Analysis Center (AUSTRAC) had previously noted it was seeking a fine for AML/CTF breaches of up to AU$400 million ($284.87 million) from The Star, highlighting its investment from Bally’s Corp and Investment Holdings as proof that the operator could afford the hefty penalty.
The Star indicated previously that any penalty over AU$100 million ($71.22 million) could force the group into insolvency.
