Star Entertainment: Casino lifeline evaporates as Salter Brothers Capital ‘withdraws’, collapse a real threat
Embattled casino group Star Entertainment is once again on the verge of administration following the withdrawal of a critical $750 million lifeline.
The company had been in talks with boutique fund manager Salter Brothers Capital but advised the market that the deal was off.
In an ASX announcement on Wednesday, Star said it had “continued to work diligently with Salter Brothers Capital in relation to the refinancing proposal but has not received a binding debt commitment letter and the refinancing proposal has now been withdrawn.”
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.Without the deal, The Star is now facing a looming crisis.
It remains unable to lodge its half-year financial report for the period ended 31 December 2024 and admits “there remains material uncertainty as to the group’s ability to continue” as a going concern.
According to the Australian Financial Review, Star had enough cash to run operations for up to another week.
That leaves the company with only one potential suitor: US-listed Bally’s Corporation, which submitted an unsolicited, non-binding offer on 10 March to inject at least $250 million by taking a 50.1 per cent stake.
Bally’s operates 19 casinos across 11 US states, as well as international holdings including the Aspers Casino in Newcastle, UK.
The company has flagged a willingness to “explore alternative structures” and potentially scale up the size of the transaction, depending on Star’s needs.
In the March 10 offer to the Star board, Bally’s chairman Soo Kim, argued the deal offers more than just funding.
“Our proposal delivers more than capital: Bally’s would partner with Star in deploying our significant operating experience in turning around casino assets and growing highly successful casino businesses globally.”
Star continues to own casinos in Sydney, Brisbane and the Gold Coast, but in early March had to sell a half share of its newly opened Brisbane casino at Queen’s Wharf to Hong Kong joint venture development partners Chow Tai Fook Enterprises and Far East Consortium for $53 million.
Star also revealed in early March that it had entered into an agreement with King Street Capital Management for a $250m short-term debt facility.
More to come...
