Australia’s Star Entertainment Group said Tuesday it has extended by a week an exclusivity and process deed with private equity firm Salter Brothers Capital while the two companies continue working on a debt refinancing package for the troubled casino operator.
The original exclusivity period had been due to expire today, Tuesday 25 March, at a time when US casino operator Bally’s Corp is waiting in the wings with an alternate proposal.
In a filing, Star said it had agreed to extend the exclusivity and process deed until 1 April 2025 at the request of Salter Brothers which has advised it is working towards making a binding offer of finance by 31 March. If Star accepts this proposal, a further period of exclusivity would follow to enable preparation of long form facility documentation and finalization of conditions precedent, the casino operator added.
As Star first announced last month, the Salter Brothers refinancing proposal could provide total debt capacity for the group of up to AU$940 million (US$595 million) – enough to refinance all of its existing debt.
Star also revealed at the time that it had entered into a binding heads of agreement with its Hong Kong joint venture partners, Chow Tai Fook Enterprises and Far East Consortium, to relinquish its 50% stake in The Star Brisbane as well as all related debt in return for an up-front cash payment of AU$53 million (US$33.5 million) and the joint venture partners’ interests in two hotel and residential towers at The Star Gold Coast.
However, Bally’s threw a spanner in the works just days after that announcement by revealing an offer of its own to acquire 50.1% of Star Entertainment Group for AU$250 million (US$158 million). The US firm noted that its proposal aimed to keep Star’s assets – The Star Sydney, The Star Gold Coast and The Star Brisbane – together while introducing its expertise in reversing the fortunes of failing casino businesses.
Bally’s offer has been backed by Star’s biggest shareholder Bruce Mathieson although it has been reported that the Star boardroom still favors the Salter Brother refinancing proposal.
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