Star Entertainment Receives Shareholder Approval for AU$300M Rescue Package

In a decisive vote on June 25, Star Entertainment Group secured overwhelming shareholder backing for an AU$300 million emergency funding package. The capital, provided by Bally’s Corporation, offers critical stabilization for the Australian casino operator, currently battling severe financial distress stemming from regulatory and operational pressures.

The approved rescue is crucial for Star, which earlier acknowledged unsustainable cash consumption that exceeded revenue generation. After previous rescue attempts collapsed, the company’s board pursued multiple financial alternatives before settling on Bally’s partnership as the most viable solution to its deteriorating fiscal situation.

Deal Details and Approval

Star’s financial rescue, detailed in its ASX announcement, involves a sophisticated arrangement led by Bally’s Corporation and Investment Holdings Pty Ltd. The package comprises multi-tranche convertible notes and subordinated debt instruments, with Bally’s contributing AU$200 million and Investment Holdings AU$100 million.

Shareholders showcased near-unanimous support at the June 25 general meeting, approving four critical resolutions. Bally’s acquisition of relevant shares passed with 99.36% backing, while Investment Holdings’ stake secured 99.17% endorsement. Other resolutions, including the ratification of Tranche 1 note issuances, received between 98.83% and 99.36% approval.

Further Endorsement

Star Entertainment’s Board endorsed the strategic resolutions, citing an independent report by Grant Samuel that found the deal reasonable despite being technically “not fair” under regulatory definitions. The analysis concluded that shareholders would fare better with the investment than without it.

Chair Anne Ward reinforced this stance during her address before the vote, acknowledging the independent expert’s assessment while stressing the proposal’s critical role in delivering essential liquidity and preventing forced voluntary administration. The board maintains that the partnership is indispensable for preserving shareholder value and securing the company’s long-term viability.

Legal Pressures and Leadership Revamp

While the funding approval is a win for Star Entertainment, the company continues to navigate challenges of an  unresolved legal battle with AUSTRAC over AML/KYC compliance breaches. It has also suffered severe reputational damage, threatening independent operations. The approved capital injection is crucial for survival amid these cumulative setbacks, including massive misconduct fines and ongoing probes.

Meanwhile, Star’s announcement of new executive appointments complements Bally’s financial rescue. The company recently announced Jennifer Cronin as Interim CEO of The Star Gold Coast, alongside Patrick McGlinchey (Group Chief Legal Officer), Rowena Craze (Group Chief Risk Officer), and Helen Galloway (Independent Chair of The Star Sydney). The leadership overhaul aims to strengthen governance and promote a strong recovery.