Star looking at other options for Brisbane casino stake after deal fails
The embattled casino operator, earlier this month, said it had secured a last-minute reprieve from Chow Tai Fook Enterprises and Far East Consortium (0035.HK), opens new tab, with both sides agreeing to extend the termination deadline to July 31.
Star said key commercial issues remained unresolved by the July 31 deadline, and a last-minute request to extend talks was rejected.
As a result, Star will retain its 50% stake in the Brisbane project, as well as ownership of the Treasury Brisbane hotel and related assets.
Chow Tai Fook and Far East each own 2.8% of Star and also own a combined two-thirds of Star's Gold Coast property. Star's main casino is in Sydney.
But the failed deal carries costs. Star must repay A$10 million ($6.43 million) by August 6 and reimburse its partners about A$31 million by September 5 for past equity contributions.
If it fails to meet those obligations, it risks forfeiting its stake in the Dorsett hotel on the Gold Coast. Star will also remain liable for its share in the A$1.4 billion debt facility, due for refinancing in December, and contribute an estimated A$200 million in future equity.
The collapse of the Queen's Wharf deal marks a major setback for Star, which — alongside its Hong Kong partners — has poured in significantly more capital than initially expected to complete the project. The development is now burdened with around A$1.6 billion in debt.
($1 = 1.5559 Australian dollars)
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