Star Entertainment to sell its share of Brisbane assets to Chow Tai Fook, Far East, nabs $940m loans

Star Entertainment Group has pulled three last-minute deals out of its hat to stave off almost certain collapse. Read how they did it

Star Entertainment Group has pulled three last-minute deals out of its hat that look likely to save the company from almost certain collapse.

In a statement to the ASX at 6.30pm Friday, as Cyclone Alfred bore down on much of the east coast, Star said it had negotiated $1bn in loans to pull it out of its cash flow crisis and away of the looming spectre of administration.

Star also confirmed an earlier announcement by Chow Tai Fook and Far East Consortium that it would sell its share of its Brisbane assets - including Queens Wharf and Treasury Hotel - to its joint venture partners.

In a coup for long-suffering shareholders, Star will take full ownership of The Star Gold Coast, including the two hotels and residential towers that were two-thirds owned by the Hong Kong partners.

In its statement, Star said it had negotiated a $250m bridging loan from lenders King Street Capital, and a $750m refinancing deal with from an un-named “additional lender”.

All the deals are subject to multiple conditions and regulatory approvals.

The Star will retain ownership of the Dorsett Gold Coast under the binding agreement. Picture: Glenn Campbell

A statement from the company’s Hong Kong partners, said they had entered a heads of agreement which would result in The Star exiting ownership of its Brisbane businesses.

The Star will also acquire the HK partners’ 66.67 per cent share in the Gold Coast’s new developments, including two hotels - The Dorsett and the under-construction Andaz.

“To ensure continuity of the Brisbane casino and the jobs it has created, The Star and its

Queens Wharf employees will continue to manage the casino operations in a new service

agreement with Destination Brisbane Consortium,” the statement said.

Under the deal, the partners will pay Star $53m - with the first $35m already paid on Friday.

Another $10m will be paid before the end of March, while another $8m will be payable on the earlier of the practical completion of the Andaz or November 30.

“The agreement will therefore provide security and certainty for 2700 employees and small businesses in Brisbane that are reliant on Queens Wharf, as well as providing fair value and liquidity to The Star,” the joint venture partners’ statement said.

The partners said the agreement would “allow Star to focus on responding to the challenges ahead”.

“We are committed to keeping Queens Wharf open, and that employees keep their jobs,” the statement said.

“We acknowledge the impact that recent uncertainty has had on local employees and local small businesses, and we hope that this disruption can now end.

“We will work responsibly and collaboratively with the Queensland Government, unions and all relevant stakeholders to finish construction and keep Queens Wharf open, which is in the best interests of employees and local businesses.”

The Queens Wharf precinct will be sold to the Hong Kong companies. Picture: NewsWire / Glenn Campbell

The Star is still liable for an unspecified fine from regulator Austrac. It provisioned $399.5m in 2024 – which it hoped would cover the Austrac fine as well as a suite of other fines, underpaid taxes, ASIC proceedings, a looming class action, consultant costs and legal fees.

A week of whispers from unnamed sources had filled a void left by a lack of specifics as the Star worked on the deals behind the scenes in recent weeks, with media reports forecasting a range of possible tracks the company’s storm may take.

Some reports have said Star had been offered a $200m line of credit from its new-on-the-scene, Macau-based major investor.

One report said billionaire hotelier Bruce Mathieson had offered a cool $550m for The Star Gold Coast – but had been knocked back.

Another possibility mooted has been the appointment of administrators at the end of this week – an outcome potentially timed well given the news cycle will see front pages and online sites dominated by Cyclone Alfred.

The ASX suspended Star Entertainment Group from the market on Monday after it failed to lodge its half-year results on time.

Bruce Mathieson.

The drowning casino operator had entered a trading halt last Friday after it was unable to sign off as a going concern.

In a statement to the ASX Monday morning, Star said it was “unlikely” to lodge its report “unless, and until, it has secured a refinancing commitment that would enable The Star to refinance all of the Group’s existing corporate debt, as well as to provide additional liquidity”.

The embattled group – and its 9000 staff in two states – have been increasingly on edge since announcing the company had spent more than $100m cash in three months.

Star earlier turned down a $650m debt refinancing offer from Oaktree Capital Management.

The company also knocked back a buyout offer from Chow Tai Fook Enterprises and Far East Consortium, which have a 50 per cent share of Queen’s Wharf, as well as a 60 per cent share of The Star Gold Coast’s assets.

Queens Wharf Brisbane City. Photo: Steve Pohlner

■ Rise, fall and collapse? Timeline of Star

Uncertainty over the future of the company came after it revealed financial results on January 20, noting a “material uncertainty” over its ability to stay afloat.

Star Entertainment Group CEO Steve McCann last month said the group could return to profitability if given more “time and support”, but was realistic about the enormity of the turnaround task.

Originally published as Star Entertainment to sell its share of Brisbane assets to Chow Tai Fook, Far East, nabs $940m loans