Qld state government under pressure to approve Queen’s Wharf sale to save Star

The Queensland government is expected to green light Star Entertainment’s sale of its stake in the $3.9bn Queen’s Wharf casino precinct to its Hong Kong partners.

Brisbane, 21 January 2025. Queensland Attorney General Deb Frecklington during a press conference in Brisbane. Picture: Supplied

The Queensland government is expected to green light Star Entertainment’s sale of its stake in the $3.9bn Queen’s Wharf casino precinct to its Hong Kong partners despite lingering probity concerns about one venture partner’s alleged association with Chinese organised crime.

Chow Tai Fook and Far East Consortium have promised to retain 2700 jobs at Queen’s Wharf that had been under threat if the cash-starved Star collapsed.

The partners own a combined 50 per cent share in the hotel, retail and gaming precinct on the Brisbane River, with Star owning the remaining stake.

A spokesman for Queensland Attorney-General Deb Frecklington reiterated on Sunday the government had not received any formal submission in relation to a change to the ownership of Queen’s Wharf. But it is understood Star has kept the government informed of developments which escalated late on Friday when terms with the HK partners were formally agreed.

Chow Tai Fook and Far East Consortium are expected to hold discussions with the Queensland government in the coming weeks to gain the necessary approval for the transaction.

A report into Chow Tai Fook Enterprises was ordered by the state government in 2022.

After a 16-month probe by the state’s gaming regulator, Queensland’s Labor government declared Chow Tai Fook a suitable casino operator, with then Attorney-General Yvette D’Ath saying there was “insufficient evidence” the company was unsuitable. Last year after the election of the Coalition, Deputy Premier Jarrod Bleijie said the government was “absolutely” committed to releasing the state’s probity report into Chow Tai Fook, which has never been made public.

Star has been mired in its own probity controversies. Regulatory inquiries in both Queensland and NSW have found Star unsuitable to hold gaming licences because of failures to enforce anti-money laundering controls and other misdeeds. Its casinos in Brisbane, Gold Coast and Sydney remain under the control of government-appointed manager Nicholas Weeks.

The government will be under pressure to approve the $53m sale deal given the Hong Kong partners have promised to save thousands of jobs and there is understanding they will not be running the casino.

Star has agreed to continue to manage the casino operations for a monthly fee of $5m until March when a new casino operator will need to be found. Crown and SkyCity have been mentioned as possible replacements.

Star Entertainment’s exit from the Brisbane market will give it at least a few months of breathing space while it finalises a long-term debt restructuring plan for its remaining operations on the Gold Coast and Sydney.

The company owes $430m to a syndicate of lenders and faces a huge fine from anti-money laundering regulator Austrac that could top $300m. Star announced Friday it was seeking access to more than $1bn in financing to shore up its liquidity.

That included a $250m bridge funding facility and a refinancing proposal that had the potential to provide total debt capacity for the group of up to $940m.

The company said the bridging facility with King Street Capital Management, with an interest rate of 15 per cent, will provide Star with liquidity to be able to implement a longer-term refinancing strategy.

Star shares have been suspended since March 3 for its failure to lodge half-year accounts, and will not trade before March 18, when its financial report is released to the market.

The Australian reported on Thursday that a $200m bridging loan had been offered to Star from Queensland coal billionaire Chris Wallin, founder of QCoal, but was rejected.

Star was facing having to make a $212m equity contribution for Queen’s Wharf as part of the refinancing of the $1.4bn in debt still owed on the project.

The company is now setting its sights on its Gold Coast properties and will acquire the Hong Kong partners’ interest in the 313-room Dorsett and 202- room Andaz hotel towers at The Star Gold Coast. “This consolidates the gaming and non-gaming assets on the Gold Coast to being entirely owned by The Star,” the company said.

The Star will retain its rights to future development at The Star Gold Coast, noting that the 6.7ha site has freehold title and existing plans to develop up to three additional towers.

Originally published as Qld state government under pressure to approve Queen’s Wharf sale to save Star