US investment firm Oaktree has escalated the bidding war with The Star and Blackstone for beleaguered casino giant Crown Resorts (ASX:CWN)
, with a revised funding offer of $3.1 billion.
The proposal promises to assist the $8.3 billion entertainment company in buying back Consolidated Press Holdings’ 36.8 per cent interest in Crown.
James Packer’s private investment firm has been forced to abstain from involvement in the operation of Crown Resorts until 2024, in the casino operator’s bid to returning to good regulatory standing and reclaim its casino licence.
Findings from investigations under the Bergin inquiry and the Royal Commission into Crown’s operations and compliance suggest that Mr.Packer’s involvement is one of key factors rendering Crown unsuitable to hold a casino licence.
The improved offer consists of debt and equity components. Under the deal, Oaktree will supply $2 billion in a private loan with a term of seven years. The repayment plan consists of an annual interest rate of 6 per cent for the first two years and 6.5 per cent for the remaining five years.
The convertible facility will entitle Oaktree to exchange its $1.1 billion loan for a stake in Crown at $13 per security, on the condition that Crown’s share price remains above the $13 mark.
Shares in Crown Resorts (ASX:CWN)
are trading 0.6 per cent lower at $12.15