Australia's Star casino shareholders approve US$195 million rescue package
SYDNEY: Star Entertainment Group's shareholders on Wednesday approved an A$300 million (US$195 million) rescue package that will allow the embattled Australian casino operator to continue operations, according to a company presentation.
The rescue bid is led by US casino firm Bally's Corp and the Mathieson family, which is Star's largest existing shareholder.
The proposal, put to shareholders at a Sydney meeting, was approved by more than 98 per cent of proxy votes, according to company slides shown at the event, which was live-streamed. A final vote result will be announced later on Wednesday.
Australia's second-largest casino operator after Blackstone-controlled Crown Resorts, Star has been battling a deepening debt crisis and regulatory probes over the past two years.
The rescue deal comprises multi-tranche convertible notes and subordinated debt instruments. Upon conversion of the notes, Bally's and the Mathieson family will control around 56 per cent of Star's issued capital.
Star chairman Anne Ward said the board had no choice but to support the Bally's-led bid after rival interest from Oaktree and Salters Brothers collapsed earlier this year.
"The strategic investments ... provide cash funding and assist Star's ability to continue as a going concern, helping to avoid outcomes such as voluntary administration, which is likely not in the best interests of shareholders," Ward told the meeting.
In March, Star said it would sell half of its A$3.6 billion Queen's Wharf project in Brisbane to Hong Kong-based Far East Consortium International and Chow Tai Fook Enterprises for just A$53 million. It has also sold a theatre attached to its flagship casino in Sydney's inner city as part of efforts to stay solvent.
Bally's owns 19 casinos across 11 US states, according to its website, and the Star deal marks its first investment in Australia.
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