Funding life rafts for Star Entertainment are coming thick and fast, with another rescue package mooted for the casino and entertainment group as it tries to stay afloat.
As Star confirmed it had had received a A$250 million recapitalisation offer from United States gaming giant Bally's Corporation, new reports emerged it was negotiating a $750 million refinancing package with property funds management group Salter Brothers.
Star told the Australian Securities Exchange (ASX) it would consider the proposal from to Bally’s under which it would issue convertible notes subordinated to senior lenders and convertible into at least 50.1% of its fully diluted ordinary shares.
Bally’s would underwrite the capital raising and support the right of shareholders to participate in a significant portion of the offering on a pro rata basis.
“The Board of The Star will review Bally’s Proposal. However, there is no certainty that it will be progressed,” Star Entertainment said in the ASX announcement.
The letter from Bally’s did not include any details of other proposed terms and conditions.
The confirmation came as the Australian Financial Review (AFR) newspaper reported that Star was negotiating a $750 million refinancing package that would secure its long-term financial future.
The newspaper identified Salter Brothers as the previously unnamed lender that Star had referred to in an ASX announcement last Friday as having made a refinancing proposal which would provide sufficient liquidity to refinance all corporate debt.
The announcement included news that Star had agreed to sell 50% of the new Star Brisbane casino and resort to its joint venture partners Chow Tai Fook Enterprises and Far East Consortium International and signed a $250 million bridge facility to provide more cash while it seeks liquidity for a long-term refinancing of senior debt.
The AFR said Star had until 18 March to finalise the funding package.
At the time of writing Star had not responded to a request for comment on the AFR article.
Star’s shares are suspended because its directors had been unable to sign the accounts due to doubts about its ability to meet short-term liabilities as it burns through cash, which amounted to $79 million on 31 December.
