Financial analyst agency Jefferies has cast some doubts on Star Entertainment’s capacity to refinance its debt on the back of its lagging Queen’s Wharf Brisbane project.
The brokerage considers that the Queen’s Wharf Brisbane debt refinancing will be a challenge due to tightened cash flow, with Jefferies estimating that the project could only be completed in the first half of 2025, signifying potential delays and prolonged financial strain.
In June of this year, Star announced that the opening of its AU$3.6 billion ($2.4 billion) resort and casino would have to be delayed again to April 2024, following mounting expenses related to the pandemic years and construction costs.
The Queen’s Wharf project is a joint venture in which Star owns 50 per cent, with Hong Kong companies Far East Consortium and the Chow Tai Fook each holding 25 per cent.
Construction giant Multiplex, which started building the Queen’s Wharf facility in mid-2019, has submitted claims for additional costs, extensions of time and damage, with Star and its joint venture partners having finally reached a settlement that can help the project go forward.
Still, Jefferies warned that 25 percent of interest costs stemming from the AU$1.6 billion ($1 billion) project debt remain unhedged, which raised concerns about the project’s overall financial stability and its implications on the group’s future.
