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Australia's Star Pursues Bally's Lifeline After Failing to Secure New Debt Package

Australia's Star Entertainment is exploring a financial lifeline from U.S. casino group Bally's Corp after its A$940 million ($590 million) refinancing proposal from Salter Brothers Capital fell through. The Sydney-based company, the nation's second-largest casino operator, stated that several conditions needed for the Salter proposal were unlikely to be met in time to address its immediate liquidity requirements.

This development poses a significant challenge for Star, which has been grappling with a growing debt crisis and ongoing regulatory investigations over the past two years. The company is now considering Bally's offer from March 10, which includes a A$250 million recapitalization package that would give Bally's control of 50.1% of Star.

Star shares remain suspended on the Australian Securities Exchange, and the company has acknowledged "material uncertainty as to the Group's ability to continue as a going concern." Reports indicate Star has enough cash to sustain operations for only one week, though the company declined to comment on its cash position.

The unsuccessful negotiations with Salter Brothers followed extensive discussions that included state governments and regulators. Star explained in an exchange filing that it became clear many of the conditions needed for the refinancing would not be satisfied in time to meet its liquidity needs, particularly regarding lenders' requirements for specific rights associated with the security of non-gaming assets. As a result, Star remains unable to file its half-year results without an appropriate refinancing proposal.