Bally’s Corporation considered waiting for Star Entertainment to enter voluntary administration before investing but feared the casino group would be too hard to rescue.
The insight has come from the gaming firm’s chairman, Soo Kim, who spoke with Reuters about the move. It’s said the initial funds will help keep Star afloat for 15 months while seeking regulatory approval for the full investment.
This comes after the US gaming giant struck a lifeline deal with Star Entertainment as they agreed to a AU$300 million (US$187 million) rescue package.
The announcement came at a critical time for the casino operator as it has been under mounting financial pressure. It’s also one of the largest Australian entertainment and gaming companies that operates casino and resort properties in Sydney, Brisbane and the Gold Coast.
Bally’s owns and operates casinos too, but across 11 states along with a golf course in New York and a horse racetrack in Colorado. It holds OSB licenses in 13 jurisdictions in North America. It’s not all US-focused though as it acquired the UK-based Aspers Casino in Newcastle.
What is Bally’s Corporation and Star Entertainment agreement?
Under the terms of the provisional deal, Bally’s Corp will inject AU$300 million (roughly USD $187 million) into the business through a mix of convertible notes and subordinated debt. There are two tranches that were listed out in the binding term sheet.
During the announcement, Bally’s stated it would “bring a proven track record of revitalising underperforming casino businesses.”
On discussing how it would work, the corporation said it would “continue to work collaboratively with regulators and stakeholders to support a successful turnaround of The Star.”
The Chairman of Bally’s, Soo Kim, said in the press release: “This transaction provides Bally’s the opportunity to infuse The Star with what it needs to regain its position as Australia’s preeminent gaming destination. And it allows The Star shareholders to share in what we confidently believe will be a brighter future together.”
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