Sales process for Melbourne Star draws to a close

Final offers are being made for the Melbourne Star observation wheel as the sale of the tourist attraction draws to a close after Covid dealt it a death blow.

The sales process for Melbourne Star is drawing to a close with administrators for the giant observation wheel getting ready to receive final offers.

Administrator Grant Thornton has also received $3.2m in claims from 65 parties who say they are owed money by the tourist attraction, although $2.47m of this sum is from Melbourne Star’s Swiss owner.

The details are contained in the latest report to creditors lodged with the Australian Securities and Investments Commission.

Grant Thornton administrator Andrew Hewitt said he has signed non-disclosure agreements with “several parties” who are now going through an investment brief for the 120m tall observation wheel.

Melbourne Star observation wheel. Picture: Brendan Francis

“We are presently liaising with several interested parties who have entered a due diligence period and we are currently awaiting confirmation of any final offers,” the report said.

“To ensure that we do not prejudice the ongoing sales campaign, we are unable to provide any further particulars at this time. Further correspondence will be issued to all creditors upon the conclusion of the sales campaign.”

Mr Hewitt said he was still investigating whether the company behind Melbourne Star – MB Star Properties – traded while insolvent, although he noted directors would have access to safe harbour provisions which provide a number of protections from insolvent trading claims.

He has not identified evidence of any uncommercial transactions, unreasonable director related transactions or unfair loans.

The report points out that while Covid delivered the Dockland’s tourist attraction a death blow, it had been under financial pressure for a number of years.

“Our investigations into the affairs of the company indicate that the company’s revenue steadily declined in the four financial years preceding the pandemic,” Mr Hewitt said.

The Melbourne Star lit up Docklands for more than a decade. Picture: Visit Victoria

“However, due to international border closures and lockdowns imposed throughout Australia from March 2020 the company’s revenue severely deteriorated from previous levels throughout 2020 and 2021 and as such, these were significant contributing factors to the company’s current financial position and the overall failure of the business.

“In addition, the company’s management recognised the need to continuously invest in the infrastructure of the business to uphold quality, safety and efficiency. Reduced earnings made these such investments unfeasible.”

Melbourne Star, which has lit up the Docklands skyline for more than a decade, was placed into liquidation in September.

Swiss-based Robu Group, which specializes in making giant observation wheels, bought the attraction in February for an undisclosed sum.