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It appears Star Entertainment (ASX:SGR) has won a reprieve from financial collapse, signing a deal with U.S. gaming giant Bally’s Corporation which will soon provide the casino operator with a $300 million injection.
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On Monday, Star entered a binding term sheet with Bally’s; the investment takes the form of a multi-tranche convertible note and subordinated debt interest.
Bally’s will provide Star with $100 million on or before Wednesday, April 9, then follow this up with an additional $200M pending a shareholder vote to approve the transaction and regulatory approvals; alternatively, the second tranche will be paid in two parts: $100M to be paid to Star after shareholders have approved, and another $100M after regulatory approvals being received.
In terms of the latter, the million-dollar payment would be received no later than October 7, should regulatory approvals be outstanding.
Also in the works is a discussion with Investment Holdings Pty Ltd – Star’s biggest shareholder, which is controlled by the Mathieson family – to consider whether it could provide up to $100M of the investment.
Any decision on that front would then reduce Bally’s contribution to $200M.
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Star’s board unanimously recommended support for the Bally buy among shareholders, with a meeting to be held in late June to vote for this.
Star shares last traded at 11 cents before halting some weeks ago.
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