Embattled casino giant Star Entertainment will have to pay back $41 million after a lifeline deal to offload its stake in the Brisbane Queen’s Wharf development to overseas partners fell through.
In a statement to the ASX today, Star announced it had failed to reach an agreement with its Hong Kong-based joint venture partners Chow Tai Fook Enterprises and Far East Consortium.
“As of this morning, the parties have been unable to reach agreement on a number of outstanding commercial issues which in turn prevent the finalisation of long form documents,” it said.
Star’s shares dropped to 10 cents this morning off the back of the announcement.
The casino operator’s proposed extension for negotiations to August 6 had also been rejected.
The heads of agreement have been terminated, and Star will retain 50 per cent equity in Destination Brisbane Consortium, Destination Gold Coast Consortium, and the Treasury Hotel in Brisbane.
Star will have to repay the joint venture partners $10 million in proceeds by August 6 and $31 million in equity contributions by September 5.
The Brisbane Queen’s Wharf development deal announced in March consisted of Star’s 50 per cent stake in exchange for a $50 million cash injection.
Star said it is continuing to engage with joint venture partners and will provide an update if there are any material developments.
It is also ”considering what alternative options may be available”.
Star runs three casinos in Brisbane, the Gold Coast, and Sydney and has been struggling to remain afloat since last year.
It is also awaiting a court decision over alleged breaches of anti-money-laundering laws, and could owe hundreds of millions of dollars.
