Embattled casino operator Star Entertainment will be forced to pay about $41 million to overseas investors after failing to meet a deadline to offload its stake in Brisbane’s Queen’s Wharf development.<\/p>\n
In a statement to the Australian Securities Exchange (ASX) on Friday morning, Star Entertainment said it had been “unable to reach an agreement” with its joint venture partners Chow Tai Fook Enterprises and Far East Consortium International Limited.\u00a0<\/p>\n
The Star statement said it had proposed an extension of the talks to August 6, but that was not accepted by the Hong Kong-based joint venture partners.\u00a0<\/p>\n
The heads of agreement was terminated as a result, and Star will retain its 50 per cent equity in Destination Brisbane Consortium (DBC) and Destination Gold Coast Consortium, as well as the Treasury hotel in Brisbane.\u00a0<\/p>\n
In March, Star, which operates casinos in Brisbane, the Gold Coast and Sydney, had reached an agreement with the owners of the other half of Brisbane’s Queen’s Wharf casino and hotel development to take over its 50 per cent stake.<\/p>\n
<\/p>\n
Star said on Wednesday the deal was “unlikely” to be done by July 31. (Supplied: Star Entertainment Group)<\/p>\n
In its quarterly update posted to the ASX on Wednesday, the company flagged a deal was “unlikely” to go through before the July 31 deadline.<\/p>\n
The termination of the deal means Star will have to pay their partners $10 million in proceeds\u00a0from the DBC venture on top of the estimated $31 million for the payments made by the joint venture partners for their DBC equity.<\/p>\n
The due date for the $10 million is August 6, while the larger payment for the equity must be paid by September 5.<\/p>\n
If those payments cannot be made Star will have to transfer one third of the interest for Tower Hotel at the Gold Coast.\u00a0<\/p>\n
Continued investment to finish Queen’s Wharf<\/p>\n
In addition to those short-term payments, the termination means Star will be on the hook for future contributions to DBC, estimated to be around $200 million.\u00a0<\/p>\n
“Additional equity may also be required as part of the the refinancing of the DBC debt facility which is due to expire in December,” the statement said.\u00a0<\/p>\n
That debt facility, of which Star owns 50 per cent, has a current drawn balance of $1.4 billion.<\/p>\n
The joint venture partners will have to pay Star their share of equity contributions to the Gold Coast consortium, which is estimated to be $1 million.\u00a0<\/p>\n
Star Entertainment said it would continue to engage with the joint partners and “provide an update if there are any material developments regarding the parties’ respective interests in DBC and DGCC”.\u00a0<\/p>\n
Star has been plagued by problems since a 2021 investigation by Australia’s financial intelligence agency, AUSTRAC, and the New South Wales Independent Casino Commission, found it breached anti-money laundering regulations.<\/p>\n
A financial penalty from AUSTRAC over money laundering \u2014 potentially of up to $400 million \u2014 is also on the horizon for the company.<\/p>\n","protected":false},"excerpt":{"rendered":"Embattled casino operator Star Entertainment will be forced to pay about $41 million to overseas investors after failing…\n","protected":false},"author":2,"featured_media":36359,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2001,64,63,32936,99,32932,32935,7136,32934,21944,94,32933,701,32931],"class_list":["post-36358","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-asx","tag-au","tag-australia","tag-australian-stock-exchange","tag-business","tag-casino","tag-chow-tai-fook-enterprises","tag-deal","tag-far-east-consortium","tag-gambling","tag-qld","tag-queenss-wharf","tag-queensland","tag-star-entertainment"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/36358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=36358"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/36358\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/36359"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=36358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=36358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=36358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}