Star Entertainment Group (ASX:SGR) asked American gambling company Bally's to raise its proposed AU$250 million funding package after separate rescue talks with other creditors had failed, according to a report by the Australian Financial Review on April 4, citing three unnamed sources familiar with the matter.

Both parties had been trading term sheets since last week, including a potential capital injection that is "considerably more than Bally's earlier AU$250 million offer," per the report. Negotiators are primarily eyeing a convertible notes issuance, but an equity placement is also being considered, the report stated. Under the latter, the Australian casino operator is allowed to place up to 15% of its shares without prior shareholder approval.

The report, however, noted a "considerable skepticism" surrounding the talks.

Star Entertainment is scrambling to secure a lifeline following the withdrawal of Salter Brothers Capital from its proposed refinancing deal last April 2.

Star Entertainment did not immediately respond to a request for comment by MT Newswires.

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