Star Entertainment Group’s planned sale of its Queen’s Wharf precinct in Brisbane to its Hong Kong joint venture partners, Chow Tai Fook Enterprises and Far East Consortium, has fallen apart. The deal collapsed after the parties failed to reach an agreement on critical commercial terms. This breakdown leaves The Star holding its existing 50 per cent stake in the $3.6 billion project through the Destination Brisbane Consortium (DBC), along with a one-third interest in the Destination Gold Coast Consortium. Star Entertainment Group operates casinos and entertainment facilities. The company focuses on providing gaming, entertainment, and hospitality services in Australia.
As a result of the failed sale, The Star must now pay $41 million to its former partners. Additionally, the casino operator remains liable for its share of the $1.4 billion DBC debt facility. The Star will also need to contribute around $200 million in fresh equity to keep the Brisbane project financially viable. The joint venture partners formally withdrew from the agreement after rejecting a last-minute proposal from The Star. The proposal sought to extend the termination deadline to August 6, but was ultimately unsuccessful.
Further complicating matters, if Star fails to repay $10 million it previously received from the partners, and reimburse an estimated $31 million in equity contributions made to DBC since March, it will be forced to hand over its one-third stake in the Dorsett hotel tower on the Gold Coast. This adds further financial pressure on the company amidst the collapse of the Queen’s Wharf deal.
Following the announcement of the deal’s collapse, shares in Star Entertainment experienced a significant decline. At 11.23am AEST, shares were down 9.1 per cent, trading at 10¢. This reflects investor concerns about the financial implications of the failed sale and the company’s ongoing obligations.
