Thanks to a $300 million cash infusion from the Bally’s Corporation, Australia’s troubled Star Entertainment casino group has been saved.
The deal gives Bally’s a 56.7% stake in the company, which will help Star avoid insolvency.
In recent years, the company has faced investigations and fines from Australian regulatory bodies focused on money laundering and other financial crimes at Star Sydney.
Star also saw a $33 million infusion in March from Hong Kong investors Far East Consortium International and Chow Tai Fook Enterprises, which already owned half of the company’s Brisbane property. The deal gave Far East and Chow Tai Fook complete control of that casino and Star gained back their two-thirds ownership in the Gold Coast Star casino.
Bally’s investment sees Star receive $100 million as early as Wednesday, with another $200 million released after stockholders approve the agreement and the investment is approved by the Foreign Investment Review Board. Star’s board of directors intends to back the deal.
“Each director of The Star intends to vote all of The Star shares that he or she holds or controls in favour of the transaction, subject to those same qualifications,” the company noted in announcing the deal.
Bally’s management expressed interest in March about purchasing the entire company and keeping it from insolvency.
“We want to keep everything together rather than strip it apart,” Bally’s CEO Robeson Reeves told Sky News. “We think that things tend to operate better if they’re one larger organization where you can actually generate benefits for each of the properties one by one by making one tweak in one place.”
New South Wales Independent Casino Commission-appointed manager Nick Weeks applauded some recent improvements from the casino operator.
“We welcome progress in The Star’s remediation efforts and are confident the company is moving in the right direction with its remediation plans,” he said. “The next six months is a critical phase for The Star as it will need to show further progress with its remediation activities whilst also stabilizing its finances.”
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