Following an article in the Australian Financial Review late Monday, The Star has confirmed that it has “entered into an exclusivity and process deed” with Salter Brothers Capital in respect of a refinancing proposal being offered by Salter Brothers.
The proposal offers The Star a $750 million loan from Salter Brothers with a five-year term.
Salter Brothers is a growing player in the premium and luxury accommodation space in Australia, having made several significant purchases over the last few years.
Recent acquisitions include the majority of the Spicers portfolio, including Spicers Peak Lodge, Spicers Guesthouse and the two Spicers properties in the Sunshine Coast hinterland, Spicers Clovelly Estate and Spicers Tamarind Retreat.
Salter Brothers has also bought the Bannisters portfolio in New South Wales and the Escarpment Group’s Blue Mountains portfolio, which includes the Hydro Majestic and Lilianfels Resort & Spa.
In addition, the group owns the Sofitel Adelaide, the InterContinental Melbourne The Rialto and the Hyatt Regency in Brisbane.
However, on Friday, when acknowledging the refinancing proposal, The Star warned it wasn’t a done deal yet.
“The refinancing proposal is non-binding and subject to various conditions, including obtaining relevant probity approvals and regulatory consents for security over the group’s assets,” The Star said in an ASX statement outlining some details of the proposal.
“There is no certainty that the refinancing proposal will be progressed, that the conditions to the refinancing proposal will be satisfied, or that the refinancing proposal will be implemented.”
Yesterday The Star announced it had received a proposal from fellow casino operator Bally’s, which runs several casinos in the US, offering $250 million for a majority – 50.1 per cent – stake in the business. The Star’s current market capitalisation – essentially its worth – is $315.55 million.
The Star has been flagging existential liquidity issues since the start of the year and signed a deal on Friday to exit the $3.6 billion Queen’s Wharf development, in which it had a 50 per cent stake.
There is significant event space and hotel room inventory across The Star’s portfolio in Sydney, Brisbane and on the Gold Coast.
