The Star Entertainment Group has completed refinancing the group’s debt in full, with US$390m (approximately A$540m) of funds associated with WhiteHawk Capital Partners.
As a result, the Australian casino operator is continuing to take action on its remediation plan to meet the requirements of regulators, forming part of its strategy to improve overall compliance and efficiencies.
The Star remediation plan
The Star has been no stranger to action to regulatory action, however it is worth noting that the operator is continuing to take steps to make ongoing improvements to its compliance strategy.
Refinancing its debt will allow The Star to take action on its remediation plan and implement requirements from the New South Wales Independent Casino Commission (NICC) and the Office of Liquor and Gaming.
These include ‘decentralisation of the group’s operating model to promote greater accountability and efficiency at the property-level for business performance’ as well as technology improvements ‘to shape safer gambling behaviours and ensure appropriate ongoing monitoring’.
For the operator, this comes at a pivotal time. In March, the NICC extended the licence suspension of The Star Sydney casino once again, with Nicolas Weeks remaining as manager of the establishment until 30 September 2026 unless terminated at an earlier date.
The Star said in a press release: “The reinstatement of The Star Sydney’s casino licence and withdrawal by the Queensland Government of the deferred suspension of The Star Gold Coast’s casino licence remain subject to ongoing discussion with the respective regulators and an update is expected later this calendar year.”
Additional liquidity for The Star
The operator first entered into a binding credit facility agreement with WhiteHawk at the end of March. However, as detailed in the latest release, the three-year agreement will comprise an ‘annual interest rate based on Term SOFR plus a margin, where the resulting interest rate is materially consistent with the interest rate under the company’s previous credit facility agreements’.
Other components of the agreement include:
- Quarterly amortisation commencing from 31 March 2027.
- Minimum liquidity covenant of A$50m for the first 12 months after financial close, increasing to A$75m between 12 months and 18 months and A$100m thereafter.
- Minimum asset coverage ratio of 1.40x, based on the fair market value of secured assets, relative to the principal amount outstanding.
- Based on valuations performed before the financing, the company anticipates that it will be compliant with the coverage ratio, with the first testing date being 31 December 2026.
- Minimum EBITDA covenant commencing from 31 March 2027.
- Interest reserve account funded with the first 12 months of interest.
- Customary covenants, representations, undertakings, events of default and review events, including customary financial covenants and reporting obligations.
With the refinancing’s completion and the net of the interest reserve account required to be funded under the facility, The Star noted that it will have approximately A$130m in additional liquidity, which will be used to support its ongoing operations as well as cost-out and strategic initiatives.
EBITDA still at loss
Last month, The Star reported its third quarter results for the three months ending 31 March 2026, where it began to see the effects of its cost-saving measures, with EBITDA improving significantly compared to the same period the previous year, although still at a loss.
Cost-saving measures included the WhiteHawk refinancing deal, a binding long-term documentation with Chow Tai Fook Enterprises Limited and Far East Consortium International Limited regarding the Queen’s Wharf Brisbane and Gold Coast resorts, as well as streamlining its corporate offices.
This comes under new leadership following the completion of the A$300m strategic investment by Bally’s Corporation and Investment Holdings late last year.
The Star mentioned in its report: “Other initiatives, including with respect to administrative functions at each property and opportunities to reduce indirect costs and supplier expenses, continue to be explored to support long-term financial success of The Star and to further strengthen the group’s financial position.”
