Star Complex, operated by Star Entertainment Group Ltd. at Star Entertainment Group Ltd. in Sydney, Australia … [+]
Star Entertainment said on Monday that the company is considering a $250 million ($157 million) cash injection proposal from U.S. casino operator Bally's Corp., which is seeking control in a full Australian company.
According to a proposal sent to Star Board of Directors in the second half of last week, Bally's will provide notes for Star Fresh Capital in exchange for a 50.1% stake in the fully diluted common stock that can be converted into a Brisbane-based casino operator.
Star Board Chairman Anne Ward statement. “However, it cannot be sure it will progress.”
Barry's proposal was on Friday to pay a $53 million stake in Hong Kong billionaire Henry Cheng's Chow Tai Fook business and tycoon David Chiu's Far East Consortium to pay a $53 million stake in the Brisbane Casino Complex. Star will immediately receive $35 million in revenue from its Hong Kong partners to inject much-needed cash into the embattled company that counts Australian billionaire Bruce Mathieson among its shareholders, Far East said in a statement.
Additionally, the star said it had signed an agreement with King Street Capital Management on Friday, a $250 million short-term debt agency and is in talks with the other party to borrow $940 million in borrowing.
“While we understand the rationale for Star’s recently announced deal, we believe our proposal provides Star and its stakeholders with greater value and operational flexibility as well as retaining the upside of Star’s current projects and other assets,” Bally’s chairman Soo Kim wrote in a letter to Star Board.
Star has been competing for new capital due to the sluggish game revenue. The company said last month it was exploring options to increase its liquidity, including selling its stake in its Brisbane property as it limitedly raises $150 million in subprime debt.
The Sydney Herald reported that Star's trouble began in 2021 after the company allowed money laundering and organized crime in its casinos for many years. The following year, regulators ruled that the company was not suitable for operating its casinos in Sydney and Queensland, putting it under government supervision. Since then, almost $4 billion of Star market value has been eliminated.
