Star Entertainment Given Reprieve to Settle Queen's Wharf Deal
Star Entertainment has been granted an extension to finalize its exit from the AUD3.6 billion (US$2.4 billion) Queen's Wharf Brisbane integrated resort project. Today, the company confirmed that its Hong Kong-based joint venture partners, Chow Tai Fook Enterprises and Far East Consortium, have agreed to continue negotiations for another month, providing Star with until July 31 to complete long form documentation related to the sale of its 50% stake in the project.
LISTEN TO THIS ARTICLE:The extension follows an earlier announcement in which Star revealed that both Chow Tai Fook and Far East Consortium, each holding a 25% stake in the Destination Brisbane Consortium (DBC), were considering walking away from a previous agreement to acquire Star's full interest.
Related: Struggling Star Entertainment Secures Multi-Million Deal for Stake SaleIn a filing made this morning, Star indicated that the talks remain active, and the partners had not yet formally terminated the transaction. The Heads of Agreement, originally signed in March, remains in effect while discussions progress.
Star faces financial consequences if the documentation is not finalized by the end of July. Under the terms laid out, the company would be required to repay AUD10 million (US$6.5 million) received from its partners earlier this year, with the repayment due within 30 days.
Additionally, it must reimburse AUD26.5 million (US$17.3 million) to cover equity contributions made by the partners to DBC since March 31. This second payment is due within 60 days of the missed deadline.
The company stated that negotiations are ongoing with the goal of completing the long form documents necessary to facilitate the transition. Far East Consortium, in a separate filing to the Hong Kong Stock Exchange, confirmed that discussions had been held throughout the past week.
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New Commercial Agreement Needed to Move Forward
The discussions were focused on establishing detailed commercial terms, specifically addressing the transfer of management responsibilities related to the Queen's Wharf Brisbane project. These efforts aim to create stability and clarity for the remaining partners and stakeholders following Star's anticipated departure.
Far East Consortium also noted that it and Chow Tai Fook had reached an agreement in principle with Star Entertainment regarding key components of the proposed transition arrangement. While no final agreement has been executed, the statement signals a willingness among the parties to conclude the matter amicably and proceed with the ownership shift under mutually agreed conditions.
Queen's Wharf, now operating under the name The Star Brisbane, officially opened in August 2024. The launch was delayed by almost two years from its originally planned opening date. Despite the operational commencement, the restructuring of ownership remains a critical issue for Star as it seeks to stabilize its financial position amid broader challenges.
Compounding the situation is the potential impact on a recently approved AUD300 million (US$195 million) rescue package from Bally's Corporation and Bruce Mathieson's Investment Holdings. The rescue deal, approved by shareholders last month, is contingent on Star remaining solvent.
During a recent interview with Inside Asian Gaming, Bally's chairman Soo Kim confirmed that any significant financial penalty imposed on Star by the Australian Transaction Reports and Analysis Centre (AUSTRAC) could jeopardize the arrangement. Star has previously acknowledged that a fine exceeding AUD100 million would threaten its viability as a going concern, raising uncertainty about the future of the bailout deal should regulatory actions proceed unfavorably.
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