Bally's Throws Star a $157M Lifeline Amid Financial Struggles
Australia's embattled casino operator, Star Entertainment Group Ltd., has received an eleventh-hour recapitalization proposal from Bally's Corp, which may lead to a new era and change in control for the company.
LISTEN TO THIS ARTICLE:As confirmed by Star today, Bally's proposal involves a capital infusion of at least A$250 million ($157 million). Under the terms, Star would issue notes convertible into a majority stake of at least 50.1% in the company.
While its board is assessing Bally’s offer, Star cautioned that there is no guarantee the deal will move forward.
If the agreement works out, it would overturn Star’s previously announced plan to sell its stake in the Brisbane casino to its Hong Kong partners for A$53 million.
Last week, reports surfaced that Star has finalized a deal to sell its interest in the Brisbane property to Far East Consortium and Chow Tai Fook, which own 25% stakes each in the precinct.
The company also announced that it had secured an A$250 million short-term loan facility with King Street Capital Management and was negotiating a potential A$940 million debt deal with another party.
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Financial Strains and Regulatory Troubles
Star is scrambling to stabilize its finances and avoid insolvency as its earnings continue to feel the pinch of a worsening cost-of-living crisis. Additionally, the operator faces a potential penalty of up to A$330 million from Australia's financial crimes regulator for alleged violations of anti-money laundering regulations.
Star's woes began in October 2021 after the Sydney Morning Herald exposed allegations of money laundering, organized crime, and fraud at the company’s casinos over the years.
The report led to regulatory investigations into Star, which ultimately found it unfit to run its casinos in Sydney and Queensland. The establishments have subsequently been placed under government supervision.
Earlier this year, Star disclosed that its available cash at the end of December 2024 totaled A$78 million.
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