Australian gambling company, Star Entertainment Group, cannot catch a break. After multiple issues with financing and having a suspended licence in Sydney, the company’s latest attempt at a deal to save itself deal has broken down.
Star was expected to get a new refinancing deal with Salter Brothers Capital. According to the filing via ASX, the deal broke down and the proposal was withdrawn as Star never received a “binding debt commitment letter”.
Further, The Star states that this deal had become untenable and “unlikely” due to “a number of the conditions precedent to the Refinancing Proposal would be able to be satisfied”.
The deal would have given The Star AUD $940 million ($592,792,200) to assist with its debts. Star Entertainment also states that “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.”
Essentially, the deal broke down because it could not meet certain requirements made by Salter Brothers.
Star Entertainment does state that it intends to keep seeking new liquidity options, including the Bally deal from last month. It is in the process of selling off its 50% stake in the Queen’s Wharf project, as well as a bridge loan of AUD $250 million with King Street Capital Management.
However, to access these funds, it needs to satisfy certain conditions, like submitting the right documentation and waiting until April 29.
Star can’t catch a break but isn’t expected to fold
The company’s woes began earlier this year, as it was unable to post its half-year accounts. Shares were frozen, and continue to be. However, its monetary woes have been a two-year struggle.
Speaking to ABC, Chief Investment Officer at Opal Capital Management, Omkar Joshi, said that he doesn’t expect to see the company cease its operations:
“If they can’t arrive at a deal on a funding facility, they will likely go into voluntary administration in an effort to restructure their capital structure.
“I don’t think Star ceases to operate as a business, but the capital structure and underlying ownership would change in a voluntary administration scenario.”
