GGRAsia – Suitor ends US$169mln deal for Star’s Treasury Brisbane

Suitor ends US$169mln deal for Star’s Treasury Brisbane

Jun 20, 2023 Newsdesk Latest News, Top of the deck, World

Casino operator The Star Entertainment Group Ltd said in a Tuesday filing that the sale of its Treasury Casino and Hotel Brisbane (pictured), in the state of Queensland, has been terminated by Charter Hall Group, an Australia-listed property trust fund.

The casino firm had announced in October 2021 a deal to sell and partially lease back Treasure Brisbane to Charter Hall, for a total consideration of AUD248 million (US$168.7 million). The assets – the Treasury Hotel, the Treasury Casino, and the Queens Gardens car park – were to be held in the flagship Charter Hall Prime Office Fund.

“The Star has been advised that Charter Hall no longer intends to proceed with the proposed transaction,” said Star Entertainment in a filing to the Australian Securities Exchange.

“The basis for this is that the conditions have not been satisfied by the relevant date under the terms of the contracts,” it added. “Charter Hall declined to extend the dates for satisfaction of the conditions.”

“The Star is considering its options in relation to this matter generally,” stated the casino operator.

Star Entertainment also owns and operates The Star Sydney casino hotel in New South Wales, and another gaming venue in Queensland, the Star Gold Coast.

The casino firm is also involved in the development of the Queen’s Wharf Brisbane scheme. The Brisbane casino resort is being developed by privately-owned Destination Brisbane Consortium, a joint venture between Star Entertainment and two Hong Kong-based partners: Chow Tai Fook Enterprises Ltd, and Far East Consortium International Ltd.

The new Queen’s Wharf project has been delayed several times in recent months and is now expected to open in April 2024.

In March, the casino group raised AUD800 million in fresh group funds, in order to “deliver on its key strategic priorities and to meet the capital requirements” for which it had already made provision.

In a separate filing on Tuesday, Star Entertainment said it had been handed a reprieve from a major tax increase on gaming revenue at its Sydney casino, with the New South Wales government flagging it would delay the increase that was to start on July 1.

A statement from Daniel Mookhey, Treasurer of New South Wales, said the state’s government had been having discussions with the casinos about implementing new tax arrangements. “To permit these conversations to continue, the government plans to pursue the legislation following the forthcoming parliamentary winter recess,” it added.

In the Tuesday filing relating to that topic, Star Entertainment said it “appreciated” the ongoing negotiation with the New South Wales government.

“This proposed duty increase was policy on the run by the former Treasurer, was ill-conceived with no consultation and had no regard to the capacity of our Sydney operation to afford the impost,” said Robbie Cooke, Star Entertainment’s chief executive and managing director, as quoted in the filing.

He added: “If implemented as originally proposed, the additional duty would significantly challenge the economic viability of the Sydney business and put the jobs of up to 4,000 hard working Sydney employees in jeopardy.”

The casino operator had previously noted that it was in the process of refinancing its existing debt facilities, and separately increase its “covenant headroom”.

“Ongoing uncertainty and the prospect of increased casino duty rates in New South Wales materially increases the risk of not successfully completing these processes,” it stated.