Star confirms rescue funding proposal from Bally's
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More news: Star Entertainment has confirmed media reports that it has received an unsolicited, non-binding proposal for additional funding from US casino giant Bally’s Corporation.
Star said in a statement to the ASX that Bally's has offered to provide "a capital raise of at least $250 million, pursuant to which The Star would issue convertible notes subordinated to The Star's existing senior leaders".
Under the terms of the proposal, the convertible notes would be convertible into at least 50.1% of The Star's shares. Bally's would underwrite the entire amount of the capital raise, but would be supportive of providing The Star's existing shareholders the right to participate in a "significant portion" of the offering on a pro rata basis.
The Star said its board will review Bally's proposal, with no certainty that it will be progressed.
In a letter outlining the proposal, Bally's chairman Soo Kim noted that the company would also be "happy to explore alternative structures that would preserve value for all key constituents, including regulators, creditors, equity holders and employees".
US casino giant Bally’s in bid to rescue Star Entertainment: reports
The news: US gambling giant Bally’s has written to Star Entertainment offering an alternative rescue deal to the embattled casino operator, The Australian and Australian Financial Review newspapers have reported.
The numbers: Bally would inject a minimum of $250 million into Star and also look at using its expertise in turning around failing casinos to save the debt-ridden Australian company. Star signed a $250 million bridge loan facility late on Friday and also agreed to the sale of its stake in the Queen’s Wharf casino precinct in Brisbane to its Hong Kong partners Chow Tai Fook and Far East Consortium.
The context: The American casino giant has written to Star Entertainment offering to discuss a takeover of the company, the reports said.
“To be clear, we remain very open to discussing a larger transaction depending on our discussions regarding Star’s liquidity and capital needs,” Bally’s chief executive Soo Kim wrote in the letter to Star chairwoman Anne Ward, according to the AFR report. “We would also be happy to explore alternative structures that would similarly preserve value for all key constituents, including regulators, creditors, equity holders and employees.”
Shares in Star Entertainment were automatically suspended from trading after the company failed to lodge its half-year report before last month's deadline.
The sources: ASX, The Australian, The Australian Financial Review, ASX
