Star Reportedly Signs Binding Agreement to Sell Queen's Wharf Stake to Partners
The Star Entertainment Group has confirmed it has reached a binding deal to divest its 50% ownership in the Queen's Wharf Brisbane development to its joint venture partners for AUD53 million (US$34.5 million). The other members of the Destination Brisbane Consortium (DBC) are Far East Consortium International Ltd, which is listed in Hong Kong, and Hong Kong-based Chow Tai Fook Enterprises Ltd.
LISTEN TO THIS ARTICLE:DBC is overseeing the Queen's Wharf Brisbane project, which incorporates The Star Brisbane casino resort in Queensland's capital city. Under the new arrangement, Star will be relieved of any requirement to contribute further equity to DBC from a specified date, avoiding anticipated contributions that were projected to be at least AUD212 million.
Related: Star Entertainment's Bid to Sell Queen's Wharf Stake Could be a $26M FailureThe company will no longer earn operator fees under the existing DBC casino management agreement. Instead, it will receive fixed monthly compensation, set at AUD5 million until June 30, 2026, rising to AUD6 million per month from July 1, 2026, to June 30, 2027, and AUD7 million per month from July 1, 2027, to June 30, 2028.
The agreement will also see Star freed from its parent company guarantee covering its 50% portion of DBC's debt facility. That facility has a current drawn amount of AUD1.4 billion and is due to mature in December this year.
The transaction also includes the transfer of other Brisbane-based assets and business interests to the joint venture partners. Management of The Star Brisbane casino resort will shift to a new operator once a replacement is chosen and approved by regulators.
An earlier attempt to secure an agreement with the same partners fell through earlier this month when Far East Consortium and Chow Tai Fook did not agree to extend negotiations. Star has stated it has received approval from subordinated lenders Bally's Corp and Investment Holdings Pty Ltd to proceed with the current deal under the signed terms.
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Under the revised deal, Star will gain a two-thirds ownership in two Gold Coast hotels under the control of its Hong Kong partners. This includes the already operational Dorsett Hotel and the under-construction Andaz Hotel. Star will take over management rights for the Dorsett Hotel after a transition period of up to five years, during which it will be operated by Far East Consortium.
Star will keep exclusive development rights for future projects at its Gold Coast site, including Towers 4 and 5, and will finance all equity contributions for the Destination Gold Coast Consortium. In exchange, the joint venture partners will acquire Star's 50% interest in the Charlotte Street Car Park and its complete ownership of the Treasury Brisbane Hotel and Treasury Brisbane Car Park.
In June, shareholders approved a AUD300 million recapitalisation plan to keep the company in operation. That arrangement will ultimately result in Bally's obtaining a controlling interest in Star Entertainment.
The deal announced this week will proceed in two phases. The first phase involves the transfer of Star's DBC stake, with a deadline for completion set for November 30.
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