The Star Entertainment Group has completed the sale of its 50% stake in the Queen’s Wharf project in Brisbane, Australia, with the intention of reducing financial instability.
The casino operator, facing financial difficulties, sold its stake to Far East Consortium and Chow Tai Fook, who are joint venture partners in the broader Queen’s Wharf development in Brisbane.
Far East Consortium announced the deal to the Hong Kong Stock Exchange (HKEX) on March 7, specifying that it and Chow Tai Fook would jointly acquire The Star’s stake in the A$3.8 billion ($2.43 billion) Queen’s Wharf project for A$53 million ($33.82 million) in cash.
The payment will be made in installments, with the first payment of A$35 million ($22.4 million) expected in the coming days.
As part of the deal, Far East Consortium will also transfer its 66.7% stake in The Star casino at Broadbeach on the Gold Coast back to the Star Entertainment Group.
The sale followed a series of conflicting reports. Earlier the same day, Star denied media rumors that it had secured a buyer for its stake in the Destination Brisbane Joint Venture, the entity that operates The Star Brisbane resort.
However, Far East Consortium later confirmed to the HKEX that an agreement had been reached to acquire the stake, thereby securing full ownership of the Queen’s Wharf precinct.
As part of the arrangement, The Star Entertainment Group has agreed to terminate its casino management agreement but will continue providing management services for a fixed monthly fee. This fee will be A$5 million ($3.2 million) per month until June 2026, after which it will increase to A$6 million ($3.84 million) per month.
This deal confirms Star’s February statement that it was in negotiations with Chow Tai Fook and Far East Consortium to sell its stake in the Brisbane casino and resort.
New Troubles May Lie Ahead
Despite the sale, financial troubles continue to affect all parties involved in the project. Chow Tai Fook and Far East Consortium have faced difficulties after the contracts for their 800-unit Queen’s Wharf Residences project were cancelled.
The contract terminations were caused by unforeseen cost increases and supply chain disruptions, which led to the need to raise apartment prices by 12.5%, most of which had been sold shortly after their launch in 2022.
Star continues to face a deepening financial and reputational crisis. At the end of February, the company admitted it was actively exploring ways to secure new liquidity.
The company’s financial problems have been exacerbated by a series of regulatory investigations, operational issues, and declining investor confidence.
One major investigation is still ongoing, and as more violations are uncovered, the company faces additional financial difficulties.
As part of its asset sale strategy, The Star sold the Treasury building in Brisbane to Griffith University for A$67.5 million ($43.2 million) last year. However, despite such divestments, the company remains in a precarious financial position.
The company has yet to complete and release its half-year financial report to the Australian Securities Exchange (ASX), citing ongoing liquidity negotiations and uncertainty regarding its ability to continue operations.
Star’s troubles have already had significant market consequences. Trading of its shares has been suspended since March 1, and the delay in financial reporting has only heightened concerns about its solvency.
FTI, the insolvency firm, has reportedly been notified about the potential takeover of the company should it enter administration.
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