Australia-based casino operator Star Entertainment Group announced on Monday (April 7) that it had reached a binding terms agreement with the American casino operator Bally’s Corporation, securing a rescue plan of AUD 300 million (approximately HKD 1.4 billion) to ease the financial difficulties of the Australian firm, according to foreign media reports. This transaction, involving “multiple tranches of convertible notes and subordinated debt instruments,” will ultimately lead to the transfer of control of Star Entertainment to Bally’s Corporation.
The first tranche of approximately AUD 100 million (around HKD 470 million) is expected to be completed by Wednesday (April 9). The partnership with Bally’s Corp will allow Star Entertainment to maintain operations in the short term. According to documents, the remaining funds will be disbursed after Star Entertainment ‘s shareholders vote in June and receive regulatory approval. The notes carry an interest rate of 9%, and Star Entertainment can repay them in cash or in kind, with a maturity date of July 2, 2029. If all notes are exercised, Bally’s Corp will hold about 56.7% of the Australian firm.
In mid-March of this year, Star Entertainment received an unsolicited equity acquisition offer from Bally’s Corp, described at the time as “unrequested.” The Star also mentioned that it is currently in negotiations with its largest shareholder, Australian businessman Bruce Mathieson, who may contribute approximately AUD 100 million to the investment proposal. If negotiations are successful, Bally’s Corp’s investment amount could be reduced to AUD 200 million.
The Star Entertainment Group operates the Star Sydney in New South Wales and has a casino hotel, the Star Brisbane, in Queensland.
