Oaktree Capital Management, well-known in finance circles as a specialist in distressed debt, is offering embattled Australian casino company Star Entertainment an AU$650m (US$414m) lifeline.
company’s share price has plummeted 77% over the last year
Star is close to collapse, with cash rapidly running out and the company being forced to sell some of its assets. The company’s share price has plummeted 77% over the last year following extensive revelations of anti-money laundering failures, resulting in hundreds of millions in fines and gambling licensing issues.
Star’s board will consider Oaktree’s offer, which would need approval from the Queensland and New South Wales governments. Additional financing is necessary even if the AU$650m (US$414m) deal proceeds. The California-based firm will also require security over assets, meaning it could sell off the company’s properties if necessary if repayments aren’t forthcoming.
Oaktree has history with other struggling Australian companies. It gave Blue Sky Alternative Investments AU$50m (US$32m) in 2018 before things went south; Oaktree unexpectedly appointed receivers only nine months after the deal.
