Australian casino group Star Entertainment (SGR.AX), opens new tab said on Monday it had agreed to a A$300 million ($179.70 million) rescue package from U.S. group Bally's (BALY.N), opens new tab that will hand over control of the embattled group.
The investment will be made through multi-tranche convertible notes and subordinated debt instruments, Star said in an Australian Securities Exchange filing.
The first of the payments, about $A100 million, will be made by Wednesday, Star said, that would enable the Sydney-based group to remain afloat.
The remainder will be paid following a Star shareholder vote and the deal receiving regulatory approval, the filing said. A shareholder vote is due to be held in late June, Star added.
Star said the convertible notes would ultimately give Bally's control of about 56.7% of the Australian company on a fully diluted basis.
The company added it was in talks with its largest shareholder, Australian billionaire Bruce Mathieson, to contribute about $A100 million of the investment package. If that proceeds, Bally's investment would be reduced to $A200 million.
Sydney-based Star, Australia's second-largest casino operator, has been scrambling to stave off bankruptcy as years of regulatory scrutiny and lawsuits following money laundering allegations have left it cash-strapped and with limited lifelines.
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Its shares remain suspended from trading on the Australian Securities Exchange as it continues to be unable to lodge its half-year results in the absence of an appropriate refinancing proposal.
