The Star Entertainment’s Shareholders Give the Go-Ahead to Bally’s AUD 300M Lifeline

The Star Entertainment Group just held its General Meeting. Among other important developments, the Australian casino & hospitality giant secured shareholder approval for Bally’s AUD 300 million rescue proposal.

Shareholders Greenlight Bally’s Aid

In April, The Star revealed that it had entered into a binding term sheet with Bally’s Corporation with respect to a multi-tranche convertible note and subordinated debt instrument with an aggregate principal value of AUD 300 million ($195 million).

Under the proposal, Bally’s and Investment Holdings will invest AUD 200 million and AUD 100 million, respectively. The Star, in turn, will issue 278,517,860 convertible notes to Bally’s and 139,258,930 convertible notes to Investment Holdings.

At the recent General Meeting, this proposal received overwhelming support as approximately 99% of shareholders voted in favor of the deal. According to The Star, 99.37% approved the acquisition of relevant interest in The Star by Bally’s. In the meantime, 99.17% greenlit the acquisition of relevant interest in The Star by Investment Holdings.

Additionally, the issue of Tranche A and Tranche B convertible notes was approved by 99.15% and 98.83% of shareholders, respectively.

Bally’s Is Confident It Can Help The Star

The approval of this arrangement marks a major development for The Star, which has been experiencing regulatory and financial struggles for a long time. Since a damning report highlighted the company’s regulatory shortcomings in 2021, The Star has lost the trust of many shareholders and clients and has been struggling to make amends.

Unfortunately, many of the Australian company’s remediation measures proved suboptimal, forcing its leadership to return to the drawing board.

Bally’s, however, is convinced that it has the experience needed to make a change and open a new chapter for The Star. The company has already applied for licenses in NSW and Queensland and is fully prepared to resolve the problems plaguing The Star.  

At the same time, Bally’s and Investment Holding’s money will help the Australian casino giant overcome its pressing financial difficulties.

The Star Faces a Huge Fine

In the meantime, The Star currently faces an AUD 400 million ($260 million) fine by AUSTRAC. This could be a major setback for the company as it will offset Bally’s help.

AUSTRAC representative Simon White insisted that the fine is not meant to oppress The Star but would be a penalty that corresponds to the severity of the operator’s violations.

In other news, The Star just unveiled multiple board and C-level appointments, enhancing its team amid its continued efforts to stabilize its business.