Embattled casino group Star Entertainment (ASX:SGR) has secured a crucial debt package, providing the company with a much-needed lifeline.
The deal follows weeks of discussions between the firm’s chief executive, its lenders, state governments, and other stakeholders.
The new facilities will carry an interest rate of a hefty 13.50%, as will the existing (reduced) facility, which is fully drawn.
Star was unable to lodge its 2023-24 annual results or report by the September 2 deadline set by ASIC and the ASX, resulting in a suspension of trading in its shares.
The auditors have signed off on the report, according to Star, and the figures will be released shortly.
The casino group’s corporate lenders have agreed to provide it with a new facility of up to $200 million, while its existing $450 million facility will be reduced to $334 million.
The $200 million financing will be split into two tranches, with an immediate $100 million injection to address cost blowouts at the gaming group’s new Queens Wharf resort in Brisbane.
The first tranche is expected to be available, subject to conditions, from late October through December 20.
The lenders have also agreed to relax the covenants on the loans for the periods ending September 30 and December 31.
The second tranche will require Star to meet more extensive conditions, including raising additional subordinated capital of at least $150 million and providing further details regarding the firm’s long-term strategy.
Star’s future remains uncertain after an inquiry found the casino operator facing leadership and cultural issues, deeming it unfit to operate its Sydney casino.
Its shares are expected to resume trading today when the annual results are released.