Star Entertainment endorses Bally's financial salvage arrangement
Star Entertainment Rescue Plan Saves Struggling Australian Casino Operator
Star Entertainment Group's financial fortunes are looking a bit brighter after shareholders overwhelmingly approved a lifeline A$300 million rescue plan on June 25, 2025.
In a meeting with the Australian Securities Exchange (ASX), over 99% of votes cast supported the proposal. The vital funding, led by U.S. casino operator Bally's Corporation in partnership with Star's largest existing shareholder, Investment Holdings Pty Ltd, aims to quell the Australian casino operator's financial woes.
The deal, structured as a combination of convertible notes and subordinated debt, offers the prospect of conversion into equity, allowing Bally's to secure up to 38% of Star's issued shares and increasing Investment Holdings' stake to 23%. This majority control positions Bally's and Investment Holdings to steer the company's destiny.
Star Chairwoman Anne Ward called the transaction a necessary maneuver essential for restoring liquidity and averting voluntary administration. With the board's unanimous endorsement, the plan was also backed by an independent expert who recommended it as the better choice than no funding at all, facing the potential consequences of insolvency.
Star's financial troubles have spiraled since the company faced intense scrutiny from Australian authorities regarding allegations of anti-money laundering and counter-terrorism finance law breaches. This challenging situation has resulted in significant financial losses and damage to the company's reputation.
The rescue plan offers Star an opportunity to overcome its cash flow obstacles, stabilizing the business and positioning it for a sustainable future following the sale of assets like its 50% stake in Queen's Wharf Brisbane. Meanwhile, Bally's is working on obtaining casino operation approval from New South Wales and Queensland authorities, solidifying its role in Star's future.
Bally's Chairman Soo Kim reiterated the company's commitment to supporting Star and expressed confidence in the regulatory review process. If finalized, this transaction would mark a significant shift in Star's ownership structure from primarily domestic control to substantial foreign investment. The utilization of convertible and subordinated instruments ensures immediate financial support, with long-term interests contingent on performance and regulatory clearance.
In brief, the A$300 million rescue plan has provided Star Entertainment Group with a lifeline, essential for navigating its current financial crisis and averting collapse. While it carries implications for ownership, handing control to Bally's and Investment Holdings and diluting existing shareholders, it offers a strategic solution for Star's longstanding capital raising challenges, keeping the business afloat and focused on the future.
The A$300 million rescue plan, comprising of convertible notes and subordinated debt, offers Star Entertainment Group immediate financial aid and a possibility of conversion into equity, potentially increasing foreign investment. This plan, backed by over 99% of shareholders, aims to quell the company's financial woes, providing a lifeline for Star to navigate its current crisis and secure a sustainable future.
