The Star Entertainment receives shareholder backing for AU$300m Bally’s investment
Convertible notes from Bally’s and Investment Holdings approved to help stabilise casino operator.
Key points:
– AU$300m (US$194m) in convertible notes approved
– Bally’s and Investment Holdings may jointly exceed 50% shareholding
– Nearly unanimous shareholder support across all resolutions
The Star Entertainment Group has secured shareholder approval for a critical AU$300m capital injection, aimed at safeguarding the company’s viability amid mounting financial uncertainty.
The approval was granted at the general meeting held on 25 June, where four key resolutions received overwhelming support via poll. These included the acquisition of relevant interests in The Star’s shares by Bally’s Corporation and Investment Holdings, as well as ratification of earlier note issuances under Tranche 1. The resolutions passed with support ranging from 98.83% to 99.36% of votes cast.
The investment comprises multi-tranche convertible notes and subordinated debt instruments. Bally’s and Investment Holdings will contribute AU$200m and AU$100m respectively. If the notes are fully converted to equity, both entities will hold interests exceeding 20% each and over 50% in aggregate, triggering the need for shareholder approval under the Corporations Act.
Good to know: The Star is awaiting a judgment in civil proceedings initiated by AUSTRAC, and the company has warned that without new funding it risks entering voluntary administration
In support of the investment, the Board cited an independent report from Grant Samuel, which found the deal reasonable despite being technically “not fair” under regulatory definitions. The firm concluded that non-associated shareholders would be better off with the investment than without it.
The Board has issued a unanimous recommendation in favour of both the strategic investment and placement resolutions, describing the proposals as essential to preserving shareholder value and the long-term viability of the business.
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