Bally's Invests AUD 300M in The Star

By Bobby Samwell • Saturday, April 12 15:14 • Permanent Link

Bally's Corporation (NYSE: BALY) has finalized a binding term sheet with The Star Entertainment Group Limited (ASX: SGR) for a strategic capital investment totaling AUD 300 million. This investment includes subordinated convertible notes and subordinated debt. The transaction is intended to revitalize The Star's casino and resort properties in Sydney, Brisbane, and the Gold Coast, with Bally's potentially owning up to approximately 56.7% of The Star's fully diluted share capital post-conversion.

Under the terms of the agreement, Bally's will invest through a combination of subordinated convertible notes and subordinated debt in two tranches. Tranche 1a notes, convertible into shares representing 9.71% of The Star's pre-issue capital, amount to AUD $22.3 million. Tranche 1b notes, convertible into shares representing 4.85% of pre-issue capital, amount to AUD $11.1 million, while Tranche 1c consists of subordinated non-convertible debt totaling AUD $66.6 million. The Tranche 2 notes, convertible into shares representing 50.3% of pre-issue capital, amount to AUD $266.6 million. The conversion price is fixed at AUD 0.08 per share, with an interest rate of 9.0% per annum payable quarterly.

The issuance and conversion of certain tranches of notes are subject to shareholder and regulatory approvals, and the notes mature on July 2, 2029. Upon conversion of the notes, Bally's will have majority board representation, subject to regulatory approvals.

Bally's has available funds to support the transaction, and the binding term sheet is attached to the release. Ma Moelis Australia and Ord Minnett Limited acted as joint financial advisors to Bally's, with Kirkland & Ellis LLP and MinterEllison acting as joint legal counsel, and Senet as Australian regulatory counsel.

The Star Entertainment Group Limited (ASX: SGR) is an Australian entertainment and gaming company, operating casino and resort properties in Sydney, Brisbane, and the Gold Coast, employing approximately 8,000 team members. Bally's Corporation (NYSE: BALY) is a global casino-entertainment company with a growing omni-channel presence, owning and operating 19 casinos across 11 states and expanding its international reach with the acquisition of Aspers Casino in Newcastle, UK.

As a result of this strategic capital investment, Bally's aims to leverage its operational expertise to revitalize The Star's properties, with the potential to significantly impact its future financial performance and market standing. The market has reacted to these announcements by moving the company's shares 9.9% to a price of $15.46. If you want to know more, read the company's complete 8-K report here.

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