Australia casino group Star Entertainment agrees $180m Bally's rescue bid

April 7 (Reuters) -

Australian casino group Star Entertainment said on Monday it had agreed to a A$300 million ($179.70 million) rescue package from U.S. group Bally's that will hand over control of the embattled group.

The investment will be made through multi-tranche convertible notes and subordinated debt instruments, Star said in an Australian Securities Exchange filing.

The first of the payments, about $A100 million, will be made by Wednesday, Star said, that would enable the Sydney-based group to remain afloat.

The remainder will be paid following a Star shareholder vote and the deal receiving regulatory approval, the filing said. A shareholder vote is due to be held in late June, Star added.

Star said the convertible notes would ultimately give Bally's control of about 56.7% of the Australian company on a fully diluted basis.

The company added it was in talks with its largest shareholder, Australian billionaire Bruce Mathieson, to contribute about $A100 million of the investment package. If that proceeds, Bally's investment would be reduced to $A200 million.

Sydney-based Star, Australia's second-largest casino operator, has been

scrambling

to stave off bankruptcy as years of regulatory scrutiny and lawsuits following money laundering allegations have left it cash-strapped and with limited lifelines.

Its shares remain suspended from trading on the Australian Securities Exchange as it continues to be unable to lodge its half-year results in the absence of an appropriate refinancing proposal.

($1 = 1.6694 Australian dollars) (Reporting by Scott Murdoch in Sydney, Aaditya Govind Rao and Sameer Manekar in Bengaluru; Editing by Janane Venkatraman and Louise Heavens)