The Star Entertainment Group (SGR) has entered a binding agreement with Bally’s Corporation for a $300 million strategic investment. The funding will be provided through a multi-tranche convertible note and subordinated debt instrument. The initial tranche of $100 million is expected on or before April 9, 2025, pending senior lender consent. The remaining $200 million is contingent on shareholder and regulatory approvals, potentially split into two $100 million payments, with a final deadline of October 7, 2025.
The securities offered in Tranche 1 include notes convertible into 14.56% of The Star’s pre-issuance capital and subordinated non-convertible debt of $66.6 million, which may increase if Tranche 2 approvals are delayed. Tranche 2, when combined with Tranche 1, will be convertible into 56.7% of the company’s issued capital on a fully diluted basis. The notes carry a 9.0% per annum coupon, compounding quarterly, payable in cash or in kind. The conversion price is set at 8 cents per share, subject to standard adjustments.
The agreement is unsecured and subordinated to The Star’s existing senior debt. Shareholder approval is required for Tranche 2, alongside approvals from the Foreign Investment Review Board and probity approvals in New South Wales and Queensland. Investment Holdings Pty Ltd may subscribe for up to $100 million of the investment, potentially reducing Bally’s commitment to $200 million. The Star’s board intends to unanimously recommend the transaction to shareholders, pending an independent expert’s assessment.
The company plans to dispatch an information booklet to shareholders in late May 2025, with a shareholder meeting targeted for late June 2025. UBS Securities Australia Limited is acting as financial advisor, and Allens as legal advisor. The directors are also finalizing the company’s financial accounts for the period ended December 31, 2024, and intend to lodge them with the ASX as soon as possible.
