In a significant financial development, The Star Entertainment Group Limited (ASX: SGR) has entered into documentation for a senior secured $250 million bridge facility. Additionally, the company has engaged in an exclusivity and process deed relating to a refinancing proposal with the potential to provide total debt capacity of up to $940 million.
The Star Entertainment Group is actively pursuing various short-term liquidity initiatives as neither the bridge facility proceeds nor the refinancing proposal will address the company’s immediate liquidity requirements.
Bridge Facility Details The company, along with its subsidiaries, has signed a financing commitment letter for a $250 million senior secured bridge facility with funds managed by King Street Capital Management, a leading global alternative investment firm. This commitment aims to provide additional liquidity while The Star seeks to secure sufficient funds to implement a longer-term refinancing of its existing senior debt.
Key terms of the bridge facility include:
- Commitment and other fees
- An annual all-in interest rate of 15%, paid monthly in arrears, with up to 10% payable-in-kind
- A tenor of six months, extendable to nine months under certain conditions
- A minimum liquidity covenant of $10 million available cash
Refinancing Proposal Insights reveals that The Star has received a debt refinancing proposal from an additional potential lender, including drafts of a commitment letter, fee letter, and detailed term sheet. If finalized, this proposal would provide sufficient liquidity to refinance all of The Star’s existing corporate debt, with a total debt capacity of up to $940 million.
Key terms of the refinancing proposal include:
- Quantum of $750 million
- Ability to pay interest-in-kind for a period, enhancing the capacity to provide total debt capacity up to $940 million
- A minimum liquidity covenant of $50 million available cash
- A tenor of five years
The lender has conducted due diligence and engaged in preliminary discussions with governments and regulators regarding the proposal. The Star has entered into an exclusivity and process deed with the lender to progress the proposal, allowing the lender to complete outstanding due diligence inquiries by March 18, 2025, with a possible extension.
