Australian casino business The Star Entertainment Group Ltd acknowledged in a Tuesday filing that a consortium it is in for the building of the Queen’s Wharf Brisbane casino resort in Brisbane, Queensland, has been served with an “adjudication application” made to the Queensland Building and Construction Commission by Multiplex Constructions Qld Pty Ltd, the contract builder on the scheme.
The adjudication claim is separate from proceedings between the two sides in the Queensland Supreme Court, that were revealed last week.
Local media reports have said that as part of the judicial process, Multiplex Constructions rejects damages claims of almost AUD360 million (US$231.7 million) against it for delays on the scheme, and is in turn claiming as much as AUD420 million from the consortium.
Destination Brisbane Consortium is a joint venture owned 50 percent by The Star Entertainment, 25 percent by Chow Tai Fook Enterprises Ltd, and 25 percent by Far East Consortium Ltd.
In June, The Star Entertainment said the Queen’s Wharf Brisbane scheme was expected to open in phases from April 2024. The new time frame represents a delay from prior guidance mentioning a launch in the second half of this year.
A Tuesday filing to the Australian Securities Exchange by the Star Entertainment said that under the separate adjudication process, Multiplex Constructions is seeking awards by the state-level adjudicator for “extensions of time, certification of stage completion, entitlements to liquidated damages and payment of certain amounts”.
These related to “delay costs, set-offs, acceleration costs, variations and other amounts under the design and construct contract between Multiplex and DBC for the Queen’s Wharf Project,” added The Star Entertainment.
The Star Entertainment posted a net profit after tax, before significant items, of AUD41 million (US$26.4 million) for fiscal-year 2023, versus a loss of AUD31 million a year earlier.
The company however recorded an impairment charge of AUD2.48 billion, excluding taxes, as it had to write down significant items from volatile operating conditions at its Sydney operations and regulatory and legal costs.
That pushed the annual loss at The Star Entertainment – which currently runs The Star Sydney in New South Wales, and smaller casino operations in Queensland – to a net loss after tax of AUD2.44 billion.
Don Carducci and Michael James, analysts at JP Morgan Securities Australia Ltd, observed in a Tuesday note: “First quarter [fiscal] 2024 trends are better than fourth-quarter [fiscal] 2023.”
“Group revenue is up 3 percent across the important Sydney market,” and the group “’expect refinancing to be resolved’ in the coming months,” added JP Morgan.
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