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Tuesday, May 30, 2023

Star Entertainment mulls financing deal with Oaktree Capital

This board has been extensively Tend to pull the trigger on some kind of balance sheet relieffollowing last week Earnings downgrade and possible asset write-downThe analysts believe the casino owner may have violated a bank covenant that stipulates the maximum amount of debt it can take on relative to its revenue, taking into account changes in its revenue.

Issues for Star include operational constraints at its flagship Sydney casino and increased competition in Sydney. It has also been negotiating proposed changes to casino tax rates with the New South Wales government, which, in its current proposed form, would further affect earnings.

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As an interim measure, Star announced an “urgent review” of the operating model and assets of its flagship Sydney casino. The company is understood to have been seeking an emergency meeting with the NSW government to resolve the tax issue.

A spokesman for Star declined to comment on any talks with Oaktree or other financing options on Tuesday. The board has yet to agree on anything, but is keen to consider all options, the sources said.

It’s not surprising to see Oaktree popping the question at Star.The group had previously tracked James Packer at Rival Australian casino operator Crown Resortsbefore Crown was sold to US private equity group Blackstone.

Robbie Cooke of The Star was baptized by fire. He will announce his first results on Thursday. Louis Duvis

Oaktree Capital has also made great achievements in the field of overseas gaming. Last year, it acquired Interblock, a poker machine developer, and the gaming group J&J Ventures and Cannery Casino Resort.

Any move must be carefully designed to comply with regulations. For example, no shareholder can hold more than 10% of shares without the written consent of the NSW Independent Liquor and Gaming Authority and the Queensland Minister.

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