Soul Patts checks out Star’s refi, courts Bruce Mathieson as partner

afr.com:

Washington H Soul Pattison is one of the parties working on troubled casino operator Star Entertainment Group’s debt refinancing, and is primed to stand toe-to-toe with a heavyweight consortium led by distressed debt giant Oaktree Capital.

Casino operator Star has almost zero chance of convincing banks to support its refinancing, sources reckon.  Brent Lewin

It is understood the ASX-listed $11.7 billion conglomerate has held talks regarding a tie-up with pubs and pokies billionaire Bruce Mathieson, who swooped on 9.97 per cent of Star via an $800 million emergency capital raise earlier in late February.

Sources said both Soul Patts and Mathieson were keen to come out and play in the refinancing. However, they were expected to wait to get a read on Star’s impending AUSTRAC fine whose quantum is not yet known, as well as any changes to NSW’s tax regime for pokies operators.

Both parties have been in-and-around the business for months. While Mathieson’s participation in the equity raising is well known, it’s understood Soul Patts also picked up a slice of stock.

Star’s $1.3 billion gross debt at December end (split as $685 million in bank debt and $584 million in US private placements) is a key talking point among debt investors amid heightened leverage, slowing discretionary spending and a tougher regulatory landscape. At this point, Star’s odds of getting banks to lend to it again look almost zero.

As Street Talk has previously reported, Oaktree Capital – fresh off wedging itself into distressed cancer care provider GenesisCare’s capital structure – is understood to be working with fellow behemoth Bain Capital Credit. Still, Star’s refinancing needs are big enough for several smaller-ticket credit investors to come in,