The Star Entertainment Group (ASX: SGR) is swinging back to a proposed debt deal put forward by US casino group Bally’s Corporation after announcing this morning that Australian private equity firm Salter Brothers Capital has withdrawn a $940 million refinancing plan that would have wiped out all of its existing debts.
After extending due diligence for Salter Brothers until 1 April, The Star says the Melbourne-based investment group has failed to put forward a binding agreement that could have given the embattled casino operator the funds it needs to stabilise its balance sheet.
The company cites issues with regulators regarding the enforcement rights that Salter Brothers Capital had been seeking over non-gaming assets as one of the reasons for the deal falling over.
“The Star has 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refinancing proposal but has not received a binding debt commitment letter and the refinancing proposal has now been withdrawn,” says The Star.
“The withdrawal of the refinancing proposal follows extensive engagement by The Star with Salter Brothers Capital and relevant third parties, including state governments and regulators.
“As a result of that engagement, it became apparent that it was unlikely that a number of the conditions precedent to the refinancing proposal would be able to be satisfied, either at all or in sufficient time to address the current liquidity needs of the company.
“In particular, lender requirements for specific priority arrangements and enforcement rights in relation to their proposed security over non-gaming assets of The Star could not be met.”
Today’s announcement is another blow for The Star which appears to have no shortage of debt offers to get the business back on track, but little luck in getting them over the line.
The Salter Brothers Capital debt deal was announced on 7 March 2025, the same day as The Star revealed that it had secured a $250 million bridging facility with alternative investment funds group King Street Capital Management.
The Star said at the time that the bridging facility was put in place while the group works on a longer-term refinancing proposal for its existing senior debt.
A $750 million refinancing plan, with capacity to increase to $940 million, was at the time being negotiated with an undisclosed party – later revealed to be Salter Brothers Capital.
The term was to be for five years, which was similar to a previously announced plan with Oaktree Capital Management which had proposed a $650 million debt facility over five years.
Subject to conditions being satisfied, the King Street bridging facility appears to still be on track and available to be drawn down on 29 April 2025.
The Star affirmed today that it remains unable to lodge its FY25 half-year earnings report until it secures a refinancing proposal. The group’s shares remain suspended by the ASX until the financial report is lodged.
In the meantime, The Star is pinning its hopes on a $250 million refinancing deal with Bally’s which could help keep the embattled company afloat.
“The company continues to explore liquidity solutions that might materially increase the group's liquidity position in the medium term, including engaging with Bally's Corporation in relation to the proposal received on 10 March 2025,” says The Star.
“However, there remains material uncertainty as to the group's ability to continue as a going concern.”
Although full details of the Bally’s funding offer have yet to be disclosed, the US company said it was prepared to “move quickly” to secure a binding agreement with The Star.
Today's announcement follows last week's news that the Queensland and New South Wales governments would delay decisions on casino licences for The Star's Gold Coast and Sydney casino licences until the end of September, citing slow progress on remediation efforts due to financial challenges.
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