Star Entertainment in Jeopardy as AU$940 Million Lifeline Deal Fails

Star Entertainment Group’s survival is on the line after its AU$940 million (US$593 million) refinancing deal with Salter Brothers Capital (SBC) collapsed. The lifeline fell through over disputed security terms for non-gaming assets, which Star could not meet in time while addressing its immediate cash crisis. With liquidity reserves dwindling to one week’s operational needs, the Australian casino giant is urgently pursuing an alternative proposal by Bally’s Corporation.

The breakdown follows months of negotiations and marks Star’s third near-collapse in 90 days, triggering alarm among New South Whales and Queensland governments. The worry stems from the casino operator’s 8,000-strong workforce and critical role in regional tourism through 2,700 hotel rooms and 100+ hospitality venues.

Accelerated Asset Sales

Since last year, Star has been executing a financial overhaul to avert collapse, anchored by short-term asset divestments and debt arrangements. In March, the casino operator entered a deal to sell its 50% stake in Brisbane’s Queen Wharf Casino to partners Far East Consortium and Chow Tai Fook Enterprises for $53 million. It would also secure full ownership of the company’s Gold Coast casino complex. Concurrently, Star negotiated an AU$250 million bridge loan through King Street Capital Management, available until April 29^th under specific conditions.

These measures follow a liquidity crisis triggered by regulatory penalties tied to money laundering scandals. Another contributor is the shift to cashless gaming in NSW (with Queensland poised to follow), eroding poker profits.

Bally’s Proposal for Controlling Stake

Bally’s Corporation has positioned itself as a pivotal player in Star Entertainment’s survival strategy, proposing an AU$250 million (US$158 million) lifeline through convertible notes. The March 10^th proposal, led by Bally’s Chairman Soo Kim—a New York-based specialist in acquiring distressed casinos—would give the US company a 50.1% controlling equity stake, effectively granting Bally’s majority ownership. Pub magnate Bruce Mathieson, a key investor in Star, has proclaimed willingness to back the deal.

An Uncertain Future

Star Entertainment continues to face liquidity pressures despite the available lifeline, with its shares suspended from trading on the Australian Stock Exchange (ASX) since March 3^rd. The operator now warns it can fund operations for just seven days without new capital injections; a crisis made more crucial by the collapse of its Salter Brothers deal. The proposal by Bally’s offers potential respite but introduces ownership dilution risks.