US debt management firm Oaktree Capital Management is looming as a potential last-minute savior for troubled Australian casino operator Star Entertainment Group after putting forward a debt financing proposal to lenders.
Star revealed in a Monday morning ASX filing that the proposal from funds associated with Oaktree – which previously expressed interest in cutting a deal with Crown Resorts before Blackstone’s acquisition in 2022 – includes a commitment letter and term sheet which set out terms upon which Oaktree would be willing to provide a total of AU$650 million in two debt facilities with a term of five years.
Although the proposal is subject to numerous conditions, it is not conditional on Star raising subordinated capital nor any waiver or deferral of tax payable to state governments, the company explained.
In its filing, Star said conditions include a comprehensive security package and intercreditor documentation which requires consents from New South Wales and Queensland Governments and regulators, completion of due diligence in relation to specified matters, that the existing lenders enter a settlement and or refinancing agreement on terms satisfactory to Oaktree, the execution of long-form financing documentation and more.
The company also warned that, even if the proposal is accepted and proceeds, it will still require additional funding for the period prior to the proposal being implemented.
“The Group continues to explore possible liquidity solutions,” Star said.
“While discussions continue with respect to a range of different solutions, there is no certainty that any of these discussions or negotiations will result in one or more definitive arrangements that might materially increase the group’s liquidity position.
“In the absence of one or more of those arrangements, there remains material uncertainty as to the group’s ability to continue as a going concern.”
Star revealed last month that it was close running out of cash after burning through a large chunk of the AU$100 million debt facility it had drawn down in December, leaving just AU$79 million in available cash as of 31 December 2024.