Australia’s Star Entertainment Group has agreed an AU$300 million deal to secure its future with Bally’s Corporation.

The strategic investment by Bally’s will see Star Entertainment receive $100 million by Wednesday (9 April), subject to receipt of required consents from Star’s senior lenders, with another $200 million due after shareholder approval of the transaction.

In return, Bally’s will receive coupon interest of 9 per cent per annum and securities convertible into shares representing 56.7 per cent of the issued capital of Star Entertainment Group on a fully diluted basis. The notes are convertible at 8 cents per share.

Star Entertainment is also in talks with its largest shareholder, Investment Holdings Pty, in relation to a possible subscription by them for up to $100 million of the investment, in which case the investment from Bally’s would reduce to $200 million.

The board of directors of Star Entertainment will unanimously recommend that shareholders vote in favour of the proposed transaction, with a meeting of shareholders expected to be held in June. 

The first $100 million tranche from Bally’s is not subject to shareholder approval.

The company also confirmed on Monday that it will now aim to file its financial report for the three-month period ended 31 December 2024 as soon as possible, having previously warned that it would be unable to do so without first securing adequate funding.

Trading in the company’s shares has been suspended in Sydney since 28 February at 11 cents per share, pending the filing of the quarterly accounts.

Star Entertainment re-engaged with Bally’s last week after failing to agree a financing deal with Salter Brothers Capital. Bally’s first approached Star Entertainment in mid-March with a financing offer. 

Under the terms of the agreement, Investment Holdings founder Bruce Mathieson and Bally’s chairman Soo Kim will be appointed to the board of the directors of Star Entertainment as observers.

There will also be a shake-up in the company’s operational management team, with Australian gaming industry veterans David Curry and Con Nikitas set to join in as yet undisclosed roles.