Troubled Star Entertainment Group may get an 11th-hour reprieve. The embattled Australian casino operator received a potentially company-saving offer from U.S.-based debt-management firm Oaktree Capital to purchase its debt for $650 million AUD or about $400 million USD.
Oaktree has reportedly offered to refinance Star’s two debt facilities over a span of five years. The deal, which also included an array of conditions including the approval of governmental agencies, is not yet complete and according to Star would not fully relieve it from its debt woes.
Star’s creditors would still have to agree to the new terms that Oaktree sets out.
Star had been operating three marquee casinos in Australia, yet was forced to sell its ownership stake in its Sydney property amid its financial woes. It bucks a seemingly global trend right now, with many casino operators registering record revenue and profit figures.
The company has fallen into debt due to an array of fines. The Australian government docked it more than $100 million in 2024 alone, due to its inability to remain compliant after it failed to stop money laundering to be at the Sydney property.
Nearly a dozen former Star managers and executives are currently under civil trial in Australia for their roles in overlooking potential money laundering and criminal activity at their casinos.
The Australian Securities and Investments Commission alleges that high-ranking officials engaged in business relationships with organized crime members and did not flag potentially criminal ties to disgraced former Asian casino Suncity.
Further hitting the company’s coffers, Star’s most recently opened property, a $3.6 billion resort and casino set amid the gorgeous Queen’s Wharf section of Brisbane, was more expensive than the company anticipated. Plus, it, and the remainder of Star’s casino properties, have reportedly not lived up to advanced billing and have not drawn in as much money since opening.
The company’s stock tumbled below $0.06 USD per share amid rumors its liquid assets were worth less than $80 million and that it would not have enough to survive more than only a few months.
Yet, Star’s value has since nearly doubled after Oaktree was announced as a potential debt-consolidation partner.
But Oaktree is not the only America-based potential lifeline for Star. The Australian Financial Review reported this week that members of New York-based casino Bally’s sent members Down Under to discuss a potential deal for controlling interests in Star.
Unlike Oaktree, which would seek to reduce Star’s debt, Bally’s is a casino titan in the United States that controls online sports-betting licenses in six states in the U.S., including New York, and operates 19 brick-and-mortar casinos in 11 states.
Instead of renegotiating Star’s debt, where the struggling company would still need an infusion of capital, Bally could purchase Star or invest in the company to keep it afloat for the foreseeable future.