Australian casino operator The Star Entertainment Group Ltd said in a filing on Tuesday it had a “binding” agreement with its joint venture partners to sell to them its 50-percent interest in the Queen’s Wharf Brisbane development for AUD53 million (US$34.5 million).
The other partners at 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.
As well as Star Entertainment disposing of its interest in DBC, the deal 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”, it added.
Star Entertainment additionally said it “received the consent of its subordinated lenders Bally’s Corp and Investment Holdings Pty Ltd to support the transaction on the basis of the executed terms”.
On June 25, Star Entertainment shareholders approved a AUD300-million rescue package, which the firm said would allow it to remain operational. The deal will ultimately allow United States-based casino firm Bally’s to receive a controlling stake in Star Entertainment.
Negotiations on an original deal broke down earlier this month after investors Far East Consortium and Chow Tai Fook Enterprises refused Star Entertainment’s request to extend the talks.
The deal announced on Monday will be completed in two separate stages, according to Star Entertainment.
The sale of its stake in DBC is described as the “first stage, with a sunset date of 30 November 2025”. The casino firm is selling its interest for AUD53 million, of which AUD45 million was paid in March.
Casino fees, Gold Coast development
Star Entertainment said it would “not be required to fund any equity contributions” in relation to DBC “with effect from 31 March 2025”. The company had otherwise expected future equity contributions to be at least AUD212 million from that date.
The casino firm will also be released from its parent company guarantee in relation to its 50 percent share of the DBC debt facility – with a current drawn balance of AUD1.4 billion – which matures in December 2025.
The company said it will no longer receive the operator fee provided for under the DBC casino management agreement. Instead, it will receive a fixed fee of: AUD5 million per month until June 30 next year; AUD6 million a month from July 1, 2026 to June 30, 2027; and AUD7 million per month for the year to June 30, 2028.
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, according to Monday’s announcement.
The casino brand will acquire the joint venture partners’ 66.6 percent interests in the Dorsett Hotel and Andaz Hotel, the latter yet to complete construction.
Star Entertainment said it will fund all equity contributions required for Destination Gold Coast Consortium (DGCC), and it will “obtain the management rights for the Dorsett Hotel after a further period of management by Far East Consortium of up to five years”.
The group added that it “will retain its rights to future development at Gold Coast and will have exclusive development rights over Towers 4-5”.
The joint venture partners will acquire Star Entertainment’s 50-percent interest in Charlotte Street Car Park and the casino firm’s 100-percent interest in Treasury Brisbane Hotel and Treasury Brisbane Car Park.
