It's been a rough start to the trading week for ASX shares so far this Monday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) had dropped by a rather nasty 0.73% and is back below 8,500 points. But let's talk about what's going on with the Star Entertainment Group Ltd (ASX: SGR) share price.
Star shares are happily defying the broader market to push decisively higher this session. The embattled casino operator and ASX 200 share closed at 12 cents last week. Today, those shares opened at 12 cents but have since climbed up to 12.75 cents. That's a gain worth a healthy 6.25%.
So why are Star shares rising so enthusiastically on such a rough day for the broader market?
Why are Star shares up 6% today?
Well, it seems to be a result of the announcement Star made to investors this morning just before market open.
This announcement revealed that Star has received a debt financing proposal" from "funds associated with Oaktree Capital Management".
Investing veterans might recognise the Oaktree name, as it is the home of legendary bond market investor Howard Marks.
The debt financing proposal that has been aired by Star would see Oaktree provide "a total of $650 million in two debt facilities with a term of five years".
The proposal comes with a long list of conditions, including:
a comprehensive security package and intercreditor documentation which requires consents from New South Wales and Queensland Governments and regulators
completion of due diligence in relation to specified matters, that the existing SFA lenders enter a settlement and or refinancing agreement on terms satisfactory to Oaktree
Star Entertainment also noted that the proposal "is not conditional on The Star raising subordinated capital nor any waiver or deferral of tax payable to State Governments".
Star also warned investors that "if the Star proceeds with the Proposal, the Company will require additional funding for the period prior to the Proposal being implemented".
Investors are clearly excited by Oaktree's proposal, judging from the movements in the Star share price today. However, Star's board was quick to note that it is not a done deal just yet. It merely stated that the "board will consider the proposal".
Investors are understandably desperate to see some positive developments from Star. Even after today's share price jump, Star stock remains down a painful 31.6% in just 2025 to date, as well as down more than 71% over the past 12 months. The company has lost more than 96% of its value since October 2021.
