This move by Oaktree follows its previous interest in Australian gaming assets, having attempted to secure a deal with Crown Resorts before Blackstone’s eventual acquisition of the company in 2022.
Blackstone has also reportedly expressed interest in purchasing Star.
The proposal, while significant, comes with numerous conditions that must be met before it can be finalised. However, crucially, it does not require Star to raise subordinated capital or obtain any tax waivers or deferrals from state governments.
This aspect of the deal could make it more attractive to Star’s stakeholders, as it avoids imposing additional equity-raising requirements that might further dilute shareholder value.
According to Star’s filing, the conditions attached to the Oaktree proposal include the establishment of a comprehensive security package and related documentation.
This would require approvals from both the New South Wales and Queensland governments, as well as relevant regulatory bodies.
Additionally, Oaktree would need to complete due diligence on specific matters, and existing lenders would have to either settle or refinance existing debt under acceptable to Oaktree.
The execution of long-form financing agreements would also be necessary before the deal could proceed.
Financial lifeline may not be enough
Despite this potential financial injection, Star cautioned that securing the Oaktree financing alone would not be sufficient to fully address its liquidity crisis.The company emphasised that it would still require additional funding to manage its financial obligations before the proposal could be implemented.
Star’s announcement also indicated that the company continues to explore various liquidity solutions but warned of material uncertainty regarding its ability to remain a going concern if no definitive funding arrangements are secured.
Star’s financial troubles have been escalating in recent months. In December 2024, the company drew down a significant portion of its A$100m debt facility, leaving it with only A$79m in available cash as of 31 December.
This rapid depletion of funds has raised concerns about the company’s ability to sustain operations without urgent financial .
The potential involvement of Oaktree in Star’s restructuring efforts underscores the challenges facing the Australian gaming industry, particularly in the wake of regulatory scrutiny and economic pressures.
Over the past few years, Star has been embroiled in compliance issues, regulatory fines, and leadership changes, all of which have contributed to its financial distress.
Given Oaktree’s track record in distressed asset investment, its interest in Star could signal confidence in the casino operator’s ability to recover if appropriate financial and operational adjustments are made.
Nevertheless, Star’s future remains uncertain. The company has acknowledged that ongoing negotiations with multiple parties are still in progress and that there is no guarantee of securing a liquidity solution in time.
If Star fails to finalise an agreement that bolsters its cash position, it may be forced to explore more drastic restructuring measures, including potential asset sales or operational cutbacks.
