Bally's Invests AUD 300 Million in The Star Entertainment Group

By Tamara Parker • Sunday, April 13 15:19 • Permanent Link

Bally's Corporation has announced a strategic capital investment of AUD 300 million (approximately USD 187 million) in The Star Entertainment Group Limited (ASX: SGR). This investment comprises a multi-tranche issuance of subordinated convertible notes and subordinated debt. Upon conversion of the notes, Bally’s would own up to approximately 56.7% of the fully diluted share capital of The Star.

The investment details include: * Tranche 1 notes: * Tranche 1a: Convertible into shares representing 9.71% of The Star’s pre-issue capital, amounting to AUD 22.3 million (approximately USD 13.9 million) * Tranche 1b: Convertible into shares representing 4.85% of The Star’s pre-issue capital, amounting to AUD 11.1 million (approximately USD 6.9 million) * Tranche 1c subordinated debt: Subordinated non-convertible debt of AUD 66.6 million (approximately USD 41.5 million)

Tranche 2 notes: Convertible into shares representing 50.3% of The Star’s pre-issue capital, amounting to AUD 266.6 million (approximately USD 166.2 million)

The conversion price is fixed at AUD 0.08 per share with an interest rate of 9.0% per annum payable quarterly. The notes mature on July 2, 2029, with automatic redemption if not converted.

Bally’s has available funds to support the transaction, and the issuance and conversion of certain tranches of notes are subject to receipt of shareholder approval, regulatory approvals, execution of long-form transaction documents, and certain consents.

Bally’s Chairman, Soo Kim, expressed confidence in the brighter future of The Star, stating that the transaction provides Bally’s with the opportunity to infuse The Star with what it needs to regain its position as Australia’s preeminent gaming destination.

The Star Entertainment Group Limited, an ASX-listed company, operates casino and resort properties in Sydney, Brisbane, and the Gold Coast, employing approximately 8,000 team members and focusing on delivering premium tourism, hospitality, and gaming experiences.

Bally’s Corporation, a global casino-entertainment company, owns and operates 19 casinos across 11 states, along with a golf course in New York and a horse racetrack in Colorado. It also has a growing omni-channel presence and holds OSB licenses in 13 jurisdictions in North America.

The completion of this transaction is subject to the fulfillment of certain conditions, including shareholder and regulatory approvals, and the execution of long-form transaction documents. Following these announcements, the company's shares moved 9.9%, and are now trading at a price of $15.46. For more information, read the company's full 8-K submission here.

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