Star Entertainment, one of Australia’s most prominent entertainment names, has been locked in debate with lenders over the company’s shaky financial position.
The tale of the gaming company in 2025 has been one marked by twists and turns, including failed business deals, buyouts, and lenders refusing to give ground to a brand they consider too risky to do business with.
Star’s lenders include Australia’s Washington H Soul Pattinson, Macquarie, Perpetual, and Deutsche Bank. Some have reportedly pressed their concerns during negotiations, arguing Star’s position does not reassure them.
Star Entertainment in lender deadlock over debt
As we previously reported, Star has been attempting to persuade potential suitors, such as Bally’s, to invest in the company. In April 2025, Bally’s offered a lifeline to the business in a deal worth AUD 300 million ($180 million), which would transfer the decision-making and control through its board to the U.S.-based company.
This deal with Bally’s came on the heels of a failed Salter Brothers Capital refinancing deal, which would have given Star AUD 940 million ($592,792,200) to help offset their mounting debt.
Chief Executive of Star, Steve McCann, has been attempting to quell the rising voices of lenders. He also reportedly reassured lenders that the assets of Star were solid, having offloaded its entire 50% stake of the Queens Wharf Brisbane and sold assets from The Star Sydney Events Centre. McCann is also attempting a possible further refinancing of Star’s debt before September’s pending financial reports are due.
Lender wavers at the heart of Star’s problems
Star is delaying its financial reports until August 29, which will be another delay in reporting, as the company also stalled its mid-year accounts (as of February 2025) amid the emerging Bally’s investment deal and a reported loss of AUD 302 million ($191 million).
Star has relied on lenders since the mid-year report, saying the company has “continued to rely on the support of its lenders under the Senior Facility Agreement (SFA), including in respect of likely covenant waivers post 30 June 2025.”
These financial statements require support from lenders for the periods ended September 30 and December 31 to ensure the end-of-year financials can be submitted without breaching Star’s covenants with lenders and regulatory bodies.
“Accordingly, The Star has been, and continues to be, in discussions with the SFA lender group in respect of potential covenant waivers for 30 September and 31 December 2025. The SFA lender group has proposed various terms in exchange for providing the requested covenant waivers, which, in aggregate, are unacceptable to The Star.”
This isn’t enough for lenders to agree on the covenant waivers, with sources at The Australian Financial Review stating that they are seeking AUD 20 million upfront from the Bally’s deal, or they will not sign off on the waivers for 2025.
Additionally, the Australian Transaction Reports and Analysis Centre (AUSTRAC) is still pursuing enforcement actions against Star from 2022 for a reported AUD 400 million.
“On 30 November 2022, AUSTRAC applied for civil penalty orders against The Star Pty Limited and The Star Entertainment QLD Limited (the Star Entities) for alleged serious and systemic non-compliance with Australia’s AML/CTF laws,” said the report.
This lack of a deal between the lenders doesn’t bode well for McCann and Star, who would have to find alternative lenders if their current covenant were to be breached and face the wrath of AUSTRAC’s regulatory action.
Featured image: Ideogram
