Australian casino operator The Star Entertainment Group Ltd said in a filing on Tuesday that the deal to sell its 50-percent interest in the Queen’s Wharf Brisbane development to its joint venture partners would in likelihood not be completed by the end of this month, as per the original deadline.
The parties announced in August a binding agreement for Star Entertainment to sell its stake in the complex for AUD53 million (US$34.3 million currently), of which AUD45 million was paid in March.
The other partners in the Destination Brisbane Consortium (DBC) are Hong Kong-listed Far East Consortium International Ltd, and privately-held Hong Kong entity Chow Tai Fook Enterprises Ltd.
DBC controls Queens Wharf Brisbane (pictured), the site of The Star Brisbane casino resort, in the capital of the Australian state of Queensland.
“While we have made positive progress on satisfying the conditions precedent to the DBC component of the transaction, as at today’s date, the conditions precedent to the transaction are unlikely to be met by the original sunset date of 30 November 2025,” stated Steve McCann, Star Entertainment’s group chief executive and managing director.
“In light of this, our joint venture partners have requested an extension of the refinancing date for the DBC debt facility from late December 2025 to 31 March 2026,” said Mr McCann in his prepared remarks.
“Based on lender approval being confirmed, this would mean The Star’s parent company guarantee remains on foot for this additional period pending a release on achieving completion of the DBC transaction,” he added.
The CEO said that if an extension to the DBC transaction deadline is agreed by all parties, “we will continue to work with our joint venture partners to satisfy the outstanding conditions”.
He added however that in the absence of an agreed extension to the November 30 date, “either party has a right to terminate the transaction for convenience”.
“We believe that both The Star and our joint venture partners remain committed to completing the transaction in a timely manner,” noted Mr McCann.
Rescue bid, board changes
As well as Star Entertainment disposing of its interest in DBC, the deal announced in August will also see the casino firm transferring other Brisbane assets and interests to its joint venture partners.
The gaming firm will also transfer the management of The Star Brisbane casino resort “to a replacement operator, once one is identified and has received regulatory approval”, as disclosed at the time.
The deal is to be completed in two separate stages, according to Star Entertainment. The sale of its stake in DBC was described as the “first stage, with the casino firm not required to “fund any equity contributions” in relation to DBC since March 31.
The casino group will also be released from its parent company guarantee in relation to its 50 percent share of the DBC debt facility, which matures in December 2025.
As part of the deal, Star Entertainment will also take two-thirds of two Gold Coast hotels under construction from the Hong Kong shareholders, and will retain its rights to any future development at the Gold Coast operations.
In Tuesday’s filing, Mr McCann also noted that Bally’s Corp received last week probity approval from the regulators in the Australian states of New South Wales (NSW) and Queensland, clearing the path for the United States-based casino business to take over Star Entertainment.
Shareholders of Star Entertainment approved in June an AUD300 million rescue package.
The bid is being led by Bally’s, and involves also the Australian conglomerate Investment Holdings Pty Ltd. The latter company, currently Star Entertainment’s largest shareholder, will subscribe for AUD100 million of the aggregate amount in the exercise.
According to the CEO, Star Entertainment received a total of AUD233 million before June 30, with the final instalment of AUD67 million received from Bally’s in October.
In the same filing, Star Entertainment’s chairman, Anne Ward, said the process for conversion of the Bally’s and Investment Holdings investments into shares “is now underway and is expected to be completed later this week”.
“We have received a conversion notice from Bally’s and expect to receive a conversion notice from Investment Holdings later today,” she stated.
In aggregate, the two new major shareholders will hold around 61 percent of the issued capital in the Australian casino group.
Once the conversions occur, there will be changes to Star Entertainment’s board, with Ms Ward set to retire “later this week”. “My re-election today is only for a matter of days,” she said.
Bruce Mathieson Junior was appointed on October 10 as a non-executive director, as a nominee of Investment Holdings, and nominees from Bally’s “are also expected to join the board in coming days,” the chairman added.
