Speculation Star Entertainment Group saved from brink of collapse after Qld asset sale deal

There is speculation The Star has been saved from administration after an 11th-hour deal on some of its Queensland assets.

• Rise, fall ... and collapse? The making of a Star disaster

The Star’s Queens Wharf precinct in Brisbane will be sold to the company’s Hong Kong partners, according to media speculation.

The report, by the Australian Financial Review and quoting an unnamed source with “direct knowledge of the matter”, said an 11th-hour deal with Chow Tai Fook Enterprises and Far East Consortium was under way.

The reported deal also includes a $50m loan.

The Star is yet to make an announcement to the market on Thursday and the Gold Coast Bulletin has contacted the company for a response.

The ASX-listed company rejected an earlier offer from its Hong Kong partners to buy its 50 per cent share of the Queen’s Wharf casino precinct in Brisbane.

The consortium partners also hold a 60 per cent share of The Star Gold Coast’s assets.

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

The drowning casino operator entered a trading halt on Friday morning, saying it would be unable to lodge the report unless a rescue deal could be struck on Friday.

A standard feature of such financial reports include signed confirmation that a company is a “going concern” — meaning that it can afford to keep operating.

The report was not lodged and shares in Star sunk more than 15 per cent in minutes after the trading halt was lifted Friday afternoon.

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”.

“As noted in the Company’s recent ASX announcements, there remains material uncertainty as to the Group’s ability to continue as a going concern,” it said.

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

Star has not accepted multiple financial offers, including a $650m debt refinancing offer from Oaktree Capital Management.

Queens Wharf Brisbane City. Photo: Steve Pohlner

■ Rise, fall and collapse? Timeline of Star

That announcement came as a six-week trial of former Star executives alleging they breached money-laundering controls and didn’t fulfil corporate fiduciary duties began in the Federal Court.

The Star last revealed its financial results on January 20, noting a “material uncertainty” over its ability to stay afloat.

Star 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.

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