The future of Star Entertainment is back in doubt after the deal to sell its Queen’s Wharf Precinct in Brisbane to its Hong Kong venture partners collapsed.
Star on Monday announced the buyout deal with Chow Tai Fook Enterprises (CTFE) and Far East Consortium (Far East) had been terminated.
Far East and CTFE each holds 25 per cent of the Star’s Queen’s Wharf casino and hotel complex. Star holds the other 50 per cent as part of the Destination Brisbane Consortium (DBC).
Under the planned deal, the Far East and CTFE were to hand over $53 million in cash as well as their 66.7 per cent equity interest in The Star casino on the Gold Coast to The Star Entertainment Group for its 50 per cent interest in the Queen’s Wharf assets.
It announced the deal in March of this year.
According to report at the time, the Star was days from running out of cash as Queen’s Wharf amassed $1.6 billion in debt and still in need of millions more to complete.
The Star informed the Australian Securities Exchange that April 30 was the deadline for signing off on the deal.
But that deadline passed without a signature and Star sold its Sydney event centre for $58 million to stay afloat.
Bruce Mathieson’s Bally’s Corporation and Investment Holdings also provided $133 million to the Star after shareholders voted to accept the deal at a general meeting.
Star told the ASX on Monday that CTFE and Far East had informed them of their intent to end the deal, with five days notice, at the end of the week.
“The Star remains willing to continue negotiations with the joint-venture partners to give effect to the DBC transaction,” the Star’s notice to the ASX said.
The termination of the deal can be paused if negotiations are successful before the end of the week.
It has been reported that the Star would need to pay its Hong Kong partners $10 million after exiting the deal.
A New South Wales Government inquiry in 2021 found that the Star had allowed a convicted Macau operator to run a secret gaming room, creating money laundering and terrorism concerns.
