AFR: New York behemoth Cerberus Capital Management is canvassing Star Entertainment’s lender syndicate to identify banks or credit funds willing to sell their debt, as the battered casino giant speeds towards an insolvency and breakup of its assets.
Street Talk can reveal Cerberus’ dealmakers have made it clear to Star’s lender group that they are interested in buying a slice of its debt, which tops $400 million and is held by Westpac, Barclays, Deutsche Bank and Soul Patts, among others. Sources said the smaller lenders, who’ve run out of confidence with CEO Steve McCann’s turnaround plan and just want out, are Cerberus’ best bet of wedging itself into Star’s capital structure.
Despite receiving several loans, Star is in a race against time as it burns through cash. Louie Douvis
The sharp-nosed investor’s renewed interest in Star is yet another headache for the casino group’s top brass. That’s because if Cerberus or another distressed debt investor succeeds in scooping up a sizeable slice of Star’s senior loans – and it’s a big if at this stage – it would likely set the scene for a debt-for-equity swap.
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