Star Entertainment refinancing deal fall through
Troubled casino giant Star Entertainment is fast running out of options to avoid administration, after its much hoped for $900 million refinancing lifeline failed.
Star had been in talks with Melbourne-based Salter Brothers Capital for several weeks about a rescue package that could have provided enough cash to avert a total financial collapse of the casino company that employs more than 8000 people.
The deal foundered when financiers demanded “priority” security over non-gaming assets of the company which sits on government-owned land. However, it is understood the NSW Government was not prepared in any refinancing deal to cede first ranking security over public leasehold land.
Hopes now turn on an unsolicited offer from US-based Bally’s Corp, without which Star is likely to appoint administrators within a week.
The gaming giant is also selling its half share in the Queen’s Wharf precinct in Brisbane to its Hong Kong partners Chow Tai Fook Enterprises and Far East Consortium to reduce crippling debt levels.
Star said Wednesday it had worked “diligently” with Salter and third parties, including state governments and regulators, but the proposal has been withdrawn.
“It became apparent that it was unlikely that a number of the conditions precedent to the refinancing proposal would be able to be satisfied, either at all or in sufficient time to address the current liquidity needs of the company,” Star said.
Pubs billionaire Bruce Mathieson, who is Star’s biggest single shareholder with just under 10 per cent of the company, said the refinancing had been a “very hard deal” to put together given the changing regulatory environment and restrictions in the casino sector.
“That has been the problem from the start,” Mathieson said. “It has been very complex and it’s been very difficult. You never know what restrictions are coming in and whether it will make the whole thing unviable.”
Star has not able to lodge its half-year report for the six months to December 31 and trading in its shares remain suspended at 11c.
Salter Brothers said that after many months of work, it had became apparent it would not be able to achieve the “necessary security arrangements that we had sought.”
“We take this opportunity to express our appreciation for all the work and effort of Steve McCann and his team along with their advisors at UBS, in working with us to try and achieve an outcome,” it said.
Star said it is continuing to explore liquidity solutions including engaging with Bally’s Corporation in relation to a funding proposal received on 10 March 2025.
Star had earlier been lukewarm on the Bally deal, which would see the US firm take control of the entire company, including Queen’s Wharf.
It is understood Star would be reluctant to jettison the deal to offload Queen’s Wharf to its Hong Kong partners but it is expected Bally’s is now in the box seat to dictate terms given its offer is now the only one on the table.
Founded by Mr Kim in 2007, the fund takes “a private equity-like approach to investing in public companies while shorting equities and credit to generate alpha and manage risk during periods of market volatility”.
Jonathan Jackson, 2nd April 2025
