Executives from US-based private credit firm WhiteHawk Capital recently traveled to Australia to visit properties operated by Star Entertainment Group as the casino operator seeks to secure a major refinancing agreement.

The company is attempting to arrange a deal worth more than $400 million that would replace an existing $430 million loan facility. Star hopes to reach an agreement before the end of the month to avoid breaching the terms of its current borrowing arrangements.

During the visit, WhiteHawk’s managing director Alex Zuckerman and members of his team toured the group’s three integrated casino resorts in Sydney, Brisbane, and the Gold Coast. Sources familiar with the discussions said the visit allowed potential lenders to evaluate the scale of the business while considering whether to proceed with a binding financing agreement, according to Australian Financial Review.

Star chairman Soo Kim also attended the tour as part of ongoing efforts to reorganize the company and stabilize its finances. The casino operator declined to comment publicly on the discussions.

A refinancing agreement has become a central objective for the company’s leadership as it works to recover from years of financial and regulatory pressure.

Debt Pressures and Ownership Changes

Star has struggled financially since the suspension of its Sydney casino license in 2022 following breaches of anti-money laundering and counter-terrorism rules. Regulatory scrutiny and stricter gambling rules have affected revenue across the business.

The group has also faced higher-than-expected costs associated with the development of its Brisbane precinct. Those pressures have strained the company’s finances, and the operator reportedly came close to running out of cash on at least two occasions over the past 18 months.

Existing lenders have repeatedly granted waivers that allowed Star to avoid defaulting on its debt. However, those concessions came at a cost. Reports suggest lenders charged fees of up to AU$20 million to waive financial covenant requirements tied to the loan.

The current lending group includes firms such as Soul Patts, Macquarie, Perpetual, and Deutsche Bank. Some lenders may participate in a refinancing arrangement, although Star’s preference is for WhiteHawk Capital to provide the full funding package.

Star’s financial restructuring has coincided with a change in ownership. US casino operator Bally’s Corp and Australia’s Mathieson family, known for their investments in pubs and gaming machines, took control of the company in November and now hold more than 61 percent of the business.

The new owners aim to renegotiate the company’s debt under terms they consider more favorable as part of a broader strategy to improve Star’s financial position.

Restructuring and Legal Challenges Continue

While the refinancing discussions continue, Star’s leadership has begun a broad restructuring program designed to reduce costs and simplify operations.

Chairman Kim and chief executive Bruce Mathieson Jr. are leading efforts to dismantle the company’s central corporate office. Management responsibilities will shift back to individual casino properties in Sydney, Brisbane, and the Gold Coast.

The restructuring could result in hundreds of job losses. Reports indicate the corporate workforce may shrink from roughly 600 employees to about 150 positions, with many staff members already notified about the changes. Some workers may move into operational roles at the company’s resort precincts.

These reductions follow earlier cuts that eliminated 40 positions in November under previous management. Former chief executive Steve McCann had already implemented several measures intended to stabilize the company’s finances before his departure in December. He reduced the company’s senior lending facility from $450 million to $334 million and introduced $100 million in super-senior debt. The lenders received additional security, including rights tied to Star’s Gold Coast assets.

McCann also oversaw the sale of the Star Sydney Events Centre and arranged the sale of the company’s 50 percent stake in the Queen’s Wharf Brisbane development to partners Chow Tai Fook Enterprises and Far East Consortium. Long-form documentation for that transaction has not yet been finalized, leaving Star responsible for approximately $700 million in related debt.

The company also faces potential penalties tied to alleged breaches of financial crime laws. Australia’s financial intelligence agency AUSTRAC has brought civil action against Star, with the Federal Court expected to decide on the matter. A large fine could pose a significant threat to the company’s recovery. Star has previously warned that a penalty exceeding $100 million could push the operator into insolvency.