Star Entertainment’s $34 million stake sale in Queen’s Wharf Brisbane collapses

Star Entertainment Group will retain its 50% stake in the Queen’s Wharf Brisbane project after its Hong Kong-based joint venture partners, Far East Consortium and Chow Tai Fook Enterprises, pulled out of a planned AU$53 million (US$34 million) acquisition.

The deal, first announced in March, would have seen Star exit the Brisbane joint venture while taking full control of the Star Gold Coast.

However, the parties failed to meet multiple deadlines, with the final July 31 cut-off passing without a resolution. Star’s request to extend talks to August 6 was rejected, officially terminating the Heads of Agreement.

As a result, Star will now keep its 50% stake in Queen’s Wharf Brisbane, a one-third interest in a separate Gold Coast development, full ownership of the Treasury Brisbane hotel and car park, and a 50% interest in the Charlotte Street Car Park.

The company must repay AU$10 million (US$6.47 million) received from its partners by August 6 and reimburse AU$31 million (US$20.05 million) in equity contributions by September 5.

If it fails to pay, Star must forfeit its one-third stake in Tower 1 Hotel on the Gold Coast.

The partners will also repay Star about AU$1 million (US$647,000) for their share of contributions to the Gold Coast development since March. Star remains responsible for its 50% share of the AU$1.4 billion (US$905.29 million) Queen’s Wharf debt and about AU$200 million (US$129.33 million) in future equity commitments.

Star continues as the operator of Queen’s Wharf under the existing casino management agreement. A AU$35 million (US$22.63 million) prepayment and apartment sale proceeds remain unchanged.

Despite the breakdown, Star says it is still in talks with the partners. “Star is continuing to engage with partners and will provide an update if there are any material developments regarding the parties’ respective interests,” the company said.

“Given the termination of the HoA, Star is considering what alternative options may be available to it in relation to its 50% equity interest in DBC, along with the Treasury Brisbane hotel and car park and its 50% equity interest in the Charlotte Street Car Park.”