Star Entertainment, the troubled casino operator, is facing a significant setback as a deal to sell its 50% stake in the Brisbane Queen’s Wharf development has collapsed, resulting in a hefty $41 million liability. The company’s joint venture partners, Chow Tai Fook Enterprises and Far East Consortium from Hong Kong, were unable to come to an agreement on essential commercial issues, leading to the termination of the heads of agreement.
In a recent statement to the Australian Securities Exchange (ASX), Star confirmed the failure to reach consensus on outstanding matters. Consequently, Star’s share price plunged to 10 cents following the announcement.
Star had been seeking to extend negotiations until August 6; however, this proposal was rejected. Now, the company must repay its partners $10 million by the same August deadline and $31 million in equity contributions by September 5. The deal aimed at an exchange of Star’s stake for a $50 million cash injection, a crucial lifeline for the embattled company.
Despite the setback in this particular venture, Star retains its 50% equity in multiple entities, including the Destination Brisbane Consortium and the Treasury Hotel in Brisbane. The company has stated it will continue discussions with its partners and keep stakeholders updated on any significant changes.
As it navigates this crisis, Star is also exploring alternative options to stabilise its financial situation. The casino operator, which oversees establishments in Brisbane, the Gold Coast, and Sydney, has been struggling with financial difficulties over the past year. Additionally, it awaits a court ruling regarding alleged breaches of anti-money-laundering regulations, which could potentially result in liabilities amounting to hundreds of millions of dollars.