Bally’s invests $187m into The Star for strategic turnaround

Bally’s Corporation has officially entered into a binding term sheet with The Star Group, including a multi-tranche issue of subordinated convertible notes and debt resulting in an investment of $187m. 

Upon conversion of the transaction, Bally’s would own approximately 56.7% of the fully diluted share capital of The Star. The company’s major shareholder, Investment Holdings Pty – controlled by the Mathieson family – may separately subscribe to a portion of the debt, which would reduce Bally’s commitment by an equal amount.

“This transaction provides Bally’s the opportunity to infuse The Star with what it needs to regain its position as Australia’s preeminent gaming destination. And it allows The Star shareholders to share in what we confidently believe will be a brighter future together,” Bally’s Chairman Soo Kim said. 

The Star is an Australian entertainment and gaming company, operating casino and resort properties in Sydney, Brisbane and the Gold Coast. Bally’s will invest in and partner with The Star to help revitalize the “underperforming” casino business and support a strategic turnaround. 

The transaction is intended to preserve The Star’s long-term potential, with Bally’s committed to leveraging its operational experience to deliver a more “sustainable and resilient” business for all stakeholders.

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“We are excited to bring our reputation and operating expertise to a wonderful set of properties that operate in fantastic markets. We are up for the challenge,” Bally’s President George Papanier said. 

The issue and conversion of certain tranches of notes is subject to shareholder and regulatory approvals, with The Star expected to hold a shareholder meeting in the coming months. 

During the interim, a Bally’s representative will join The Star’s Board of Directors as an observer and upon conversion of the notes, additional and/or replacement directors will be appointed to ensure majority representation, subject to regulatory approvals.

Kirk Geller

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