Shareholders of troubled Australian casino firm The Star Entertainment Group Ltd approved on Wednesday an AUD300 million (US$195.1 million currently) rescue package, which will allow the company to remain operational, according to a company presentation.
The rescue bid is being led by United States-based casino business Bally’s Corp, and involves also the Australian conglomerate Investment Holdings Pty Ltd.
As part of the deal, Investment Holdings, currently Star Entertainment’s largest shareholder, will subscribe for AUD100 million of the aggregate amount.
The proposal passed with about 99 percent of votes in favour, according to a filing to the Australian Securities Exchange.
“The strategic investments by Bally’s and Investment Holdings provide cash funding and assist The Star’s ability to continue as a going concern, helping to avoid outcomes such as voluntary administration, which is likely not to be in the best interests of shareholders,” stated the casino group’s chairman, Anne Ward, in an address at Wednesday’s meeting.
Star Entertainment runs its core properties The Star Sydney (pictured in a file photo), and The Star Brisbane, in respectively New South Wales and Queensland.
The rescue deal consists of multi-tranche convertible notes and subordinated debt instruments, and if the notes are converted into shares, Bally’s and Investment Holdings’ respective interests in Star Entertainment’s shares – when aggregated – will exceed 50 percent.
If the notes are all converted, Bally’s will hold up to 38 percent of The Star’s issued capital while Investment Holdings will hold 23 percent, including its existing holding.
Reuters reported on Wednesday that Bally’s had applied to New South Wales and Queensland governments and regulators for approval to run casinos there.
The news agency cited Soo Kim, Bally’s chairman, as saying: “We look forward to the completion of our probity review so that we can get on with the critical mission to put The Star on a sustainable path.”
Star Entertainment’s board had “unanimously recommended” the rescue package, and an independent expert hired to advise on the deal suggested the casino firm’s shareholders would “clearly be better off if the transactions proceed than if they do not”.
Star Entertainment said in mid-April that a transaction to dispose of its 50-percent equity interest in Queen’s Wharf Brisbane to its Hong Kong-based partners “continues to progress”. The casino firm stated it was “targeting completion of the transaction by the end of June 2025”.
Since 2021, Star Entertainment has been involved in a number of probes by Australian state authorities over possible breaches of anti-money laundering and counter-terrorism laws.
