Australian casino operator The Star Entertainment Group Ltd will need to repay Hong Kong-based joint venture partners AUD41 million (US$26.6 million) after they withdrew from a deal that would have seen them buy out the 50 percent of the Destination Brisbane Consortium (DBC) controlled by Star Entertainment.
The news that Hong Kong-listed Far East Consortium International Ltd and privately-held Chow Tai Fook Enterprises Ltd had withdrawn from the deal, was given in a Friday filing to the Australian Securities Exchange by Star Entertainment. Talks had previously been extended to July 31.
DBC controls Queens Wharf Brisbane (pictured in a file photo), the site of The Star Brisbane casino resort, in the capital of the Australian state of Queensland.
Star Entertainment said that – as a result of the two Hong Kong partners not going forward with the buyout of its 50 percent stake in DBC – it will retain its 50 percent equity interest in DBC and its one-third equity interest in Destination Gold Coast Consortium (DGCC).
Star Entertainment will also retain another property portfolio – the Treasury Brisbane hotel and car park – and its 50 percent equity interest in another car park.
After the termination of the buyout of its share of DBC, Star Entertainment must repay by Wednesday (August 6) AUD10 million of proceeds it received from the joint venture partners.
The casino firm must also reimburse the joint venture partners for its share of equity contributions that have been made by them to DBC since March 31 this year.
“This amount is currently anticipated to be approximately AUD31 million… and is payable by 5 September 2025,” stated the filing.
The joint venture partners will for their part need to reimburse Star Entertainment for AUD1 million in costs.
Star Entertainment added: “The parent company guarantee in relation to The Star’s 50 percent share of the DBC debt facility – for which the total current drawn balance by DBC is approximately AUD1.4 billion – will remain on foot.”
The original casino management agreement for The Star Brisbane also “remains on foot and The Star continues to be the operator of The Star Brisbane,” added Friday’s filing. Under that, Star Entertainment also receives a casino management fee.
The casino firm added: “The AUD35 million prepayment to The Star of its share of the net sale proceeds for apartments in the Tower 2 development on the Gold Coast survives termination of the heads of agreement”.
The casino operator said it would “continue to be responsible for its share of future equity contributions to DBC, estimated to be approximately AUD200 million”.
“Additional equity may also be required as part of the refinancing of the DBC debt facility which is due to expire in December 2025,” it added.
