Star Entertainment Receives Debt Proposal from Oaktree
The struggling Star Entertainment Group has said that it has received a debt financing proposal from funds linked to Oaktree Capital Management.
LISTEN TO THIS ARTICLE:The offer includes a commitment letter and a term sheet outlining AU$650 million (US$414 million) in total funding through two debt facilities, both with a five-year term.
Related: 'Material Uncertainty' of Star Entertainment's Future Remains
Numerous Condition to Be Met
According to a filing with the Australian Stock Exchange (ASX) on Monday, the proposal is subject to multiple conditions. These include due diligence on specific matters, the provision of a comprehensive security package, and finalized intercreditor documentation. Additionally, it requires approval from both the New South Wales and Queensland governments and regulatory authorities.
A key requirement of the proposal is that existing senior facilities agreement (SFA) lenders must enter into a settlement or refinancing agreement on terms acceptable to Oaktree. However, the offer does not require The Star to raise subordinated capital or seek waivers or deferrals on tax payments to state governments.
Despite the proposal, The Star’s board must still review the offer, and there is no guarantee that the company will accept it or that all conditions will be met. If The Star moves forward with the financing plan, it may need additional funding before full implementation.
The company is continuing to explore various liquidity options, but the filing says that there is no certainty that any ongoing discussions will lead to definitive agreements that would significantly strengthen its financial position.
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Concerns About The Star’s Viability
The Star also acknowledged that without securing a viable financial arrangement, there remains significant uncertainty about its ability to continue operating.
Last week, the company turned down initial bids from its Hong Kong-listed partners, Chow Tai Fook Enterprises Limited (CTFE) and Far East Consortium International Limited (FEC), to acquire its 50% stake in The Star Brisbane integrated resort.
Despite rejecting these offers, The Star confirmed that discussions with CTFE and FEC are ongoing. The company is still considering a potential sale of its stake in the Destination Brisbane Joint Venture (DBJV), which owns The Star Brisbane.
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