As confirmed today (April 2) by Star, the Salter Brothers proposal is now off the table. Star said it had not received a binding debt commitment letter in relation to the refinancing.
Star added that it worked “diligently” with Salter Brothers, while it also held talks with several third parties including state governments and regulators. However, it was unable to come to a final arrangement and the proposal has now been withdrawn.
“It became apparent that it was unlikely that a number of the conditions precedent to the refinancing proposal would be able to be satisfied, either at all or in sufficient time to address the current liquidity needs of the company,” Star said.
“In particular, lender requirements for specific priority arrangements and enforcement rights in relation to their proposed security over non-gaming assets of Star could not be met.”
‘Material Uncertainty’
The withdrawal means Star will continue to hold off on publishing its half-year results. These cover the six-month period to Dec. 31, 2024, and were due at the end of February.
According to Star, the absence of an appropriate refinancing solution means it is unable to post the results. Star only announced the refinancing proposal with Salter Brothers last month.
There are, however, several other options still on the table. Alongside the Salter Brothers proposal was a separate, senior secured bridge facility worth $158 million.
In addition, talks remain ongoing with Bally’s over a non-binding proposal for additional funds. This would see Bally’s provide a capital raise of at least $158 million, pursuant to Star issuing convertible notes subordinated to its existing senior lenders. These notes would be convertible into at least 50.1% of Star’s fully diluted ordinary shares.
For the time being, however, Star said its future is uncertain.
“There remains material uncertainty as to the group’s ability to continue as a going concern,” it said.
Positive News on License Front
Against this backdrop of financial uncertainty, there was some good news out of Star last week.
First, news broke Queensland’s government has deferred the suspension of Star Gold Coast’s casino license to Sept. 30. This follows the latest independent advice from the venue’s special manager, Nicholas Weeks.
The government said it took into account progress regarding priority remediation measures. It also acknowledged “recent challenges” at Star impacting its ability to make headway on certain measures within a set time frame.
Meanwhile, Star has also been informed that its license for its casino in Sydney will remain suspended until the end of September. Weeks will also continue to have oversight of the casino until at least Sept. 30.
With Weeks staying in his role, this will allow Star to continue to operate gaming at the Sydney casino.
