Embattled Star Entertainment has announced that it is selling its 50 percent stake in the Queen’s Wharf project in Brisbane to its Hong Kong partners, Far East Consortium International and Chow Tai Fook Enterprises.
This move, combined with a significant consolidation of its Gold Coast assets, signals a period of restructuring for the company as it navigates financial and regulatory challenges.
The terms of the Queen’s Wharf exit agreement include the termination of Star’s casino management agreement for the property. To bolster immediate liquidity, Star will receive an upfront cash payment of AU$53 million ($33.4 million).
Additionally, a fixed monthly fee of AU$5 million ($3.2 million) will be paid during a transitional period, during which Star will continue providing casino management services until March 2026. A potential earn-out mechanism could generate up to AU$225 million ($142 million) in future consideration from The Star Brisbane, contingent on performance.
The most significant outcome of this deal is the substantial financial relief it provides Star. By shedding its commitment to further equity injections into the Destination Brisbane Consortium (DBC) joint venture after March 2025, the company avoids an anticipated AU$212 million ($133.6 million) outlay, as well as potential additional costs linked to the DBC’s debt refinancing. This effectively removes a major financial burden.
While exiting the Brisbane development, Star is strategically enhancing its presence on the Gold Coast. By acquiring its joint venture partners’ interests in the Dorsett and soon-to-open Andaz hotel and residential towers, Star will achieve full ownership, increasing its stake from 33.3 percent.
This consolidation provides complete control over all gaming and non-gaming assets at The Star Gold Coast. Star also retains full development rights for the site, allowing for the potential addition of up to three more towers under its Gold Coast Masterplan.
Furthermore, Star has already received AU$35 million ($22 million) in cash from its joint venture partners, earmarked for short-term liquidity, as the company explores broader liquidity initiatives. This immediate cash infusion, combined with the restructured financial obligations, provides crucial support during this transitional phase.
In a separate filing, Star Entertainment stated that it has entered into documentation for a senior secured AU$250 million ($158 million) bridge facility.
The bridge facility involves funds managed by King Street Capital Management.
This move is accompanied by an exclusivity and process deed concerning a comprehensive refinancing proposal. The potential outcome of this strategic restructuring is a total debt capacity for the group reaching up to AU$940 million ($593 million).
According to the company’s official announcement, these actions are designed to bolster Star’s financial stability and provide essential liquidity. The bridge facility is intended to serve as an interim measure, while the broader refinancing proposal aims to establish a more sustainable long-term capital structure.
Regarding the sale of the Queen’s Wharf stake, Group CEO and Managing Director, Steve McCann, said: “This transaction is an important milestone for the company and contributes to providing a potential pathway towards financial viability. Our team has worked hard to deliver The Star Brisbane and establish a new precinct for Brisbane. We are grateful for the efforts of all of our employees, and we will work with our joint venture partners and the regulator to transition to a new casino operator in due course.”
“This transaction is a step in the right direction for The Star. There are still a number of challenges that we need to address, including progressing short- and long-term liquidity for the company. We remain focused on remediating the business and restoring our reputation as a suitable licensee at both The Star Gold Coast and The Star Sydney.”
