Hong Kong’s Far East Consortium (FEC) has released further details on its series of transactions with Australia’s The Star Group, outlining funding arrangements, asset transfers and loan structures linked to their Queensland casino and property joint ventures.
According to a supplemental filing on Monday, Far East Consortium said it had completed the transfer of its stake in Destination Gold Coast Consortium (DGCC) to Star, leaving the Australian operator with full ownership of the project and ending FEC’s equity participation.
The Hong Kong-listed developer added that its shareholding in the Charlotte Street joint venture would remain unchanged at 50 percent following the related asset transfers.
The filing also disclosed that the joint venture partners — FEC, Chow Tai Fook Enterprises and Star — had earlier provided AU$53 million ($35.3 million) to support Star’s liquidity amid what FEC described as ‘depressed trading conditions.’
Of that amount, AU$35 million ($23.3 million) was structured as an interest-free loan to a DGCC trust vehicle, which immediately prepaid the funds to Star as a forward distribution from apartment sales at Tower 2 of the Queen’s Wharf Brisbane (Andaz) project.
Repayment of the AU$35 million ($23.3 million) loan will hinge on the completion of apartment sales and the drawdown of a hotel operating loan, with the proceeds of Tower 2 sales expected to fully cover the amount, the company said.
The remaining AU$18 million ($12 million) of the AU$53 million ($35.3 million) package forms the cash consideration payable by the joint venture partners under an implementation deed.
The Far East Consortium group stated that AU$10 million ($6.7 million) has been paid, with the balance due to be offset against an equivalent reimbursement owed by Star.
The group also reiterated the structure of an earn-out mechanism tied to the future financial performance of Destination Brisbane Consortium (DBC), operator of the Queen’s Wharf casino, which opened in August 2024. The earn-out will be calculated for FY2030 based on DBC’s EBITDA and net debt, subject to a cap negotiated between the partners.
At the same time, Far East warned that it may require ‘at least five years’ for the operations of the casino to ramp up and ‘demonstrate their full value’.
In the filing, the group noted that ‘as the Casino only commenced operations on 29th August 2024, and The Star will continue to operate it until a new operator is engaged, the parties recognize that the true value of the DBC- related assets may not yet be fully reflected at this stage’.
The group furthered that ‘the Joint Venture Partners have agreed to pay an earn-out to The Star, the amount of which will be contingent upon the future financial performance of DBC’.
Star is additionally required to reimburse AU$20 million ($13.3 million) in relation to a bank guarantee for the construction of a pedestrian footbridge at the Gold Coast site, to be paid in two tranches — AU$8 million ($5.3 million) on the Final Payment Date set for November 28th and AU$12 million ($8 million) a year later.
The company argued the overall consideration was ‘fair and reasonable’, citing Star’s financial distress, market conditions and the long-term strategic benefits for FEC, which is seeking to expand its presence in Australia’s integrated resort sector.
Regulatory risks warning
The statement also set out regulatory risks tied to casino operations at Queen’s Wharf Brisbane, including compliance with the Casino Control Act, licensing requirements, anti-money laundering rules, and the potential impact of economic downturns and competition from other gaming venues.
FEC warned that any breach of casino agreements or local gaming laws could trigger regulatory actions, including possible suspension of its Hong Kong listing should the operations be deemed unsuitable under local exchange rules.
The supplemental announcement follows earlier disclosures made in August concerning the restructuring of the partnership with Star Group.
In August, The Star secured another financial lifeline after agreeing to offload one of its businesses to East Asian partners. The company signed deals with Hong Kong-based FEC and its subsidiaries, along with Chow Tai Fook Enterprises (CTFE) — collectively the JV Partners — which will purchase one of its four resorts.
Once conditions are met, these agreements will allow The Star to exit its 50 percent ownership and management role in the Queen’s Wharf Brisbane integrated resort, a AU$3.6 billion ($2.4 billion) multipurpose residential and entertainment precinct that began redevelopment in 2015 and only started opening in stages in 2024.
The August deal also included the JV Partners acquiring The Star’s 100 percent stakes in the Treasury Hotel and Treasury Car Park, plus its 50 percent interest in the Charlotte Street Car Park — assets described as ‘strategically critical’ for guest experience.
In return, The Star took over the JV Partners’ combined 66.67 percent interest in the Destination Gold Coast Consortium (DGCC), comprising the Dorsett and Andaz towers in Broadbeach.
Negotiations had been turbulent, with an earlier agreement collapsing in August due to disputes over control of the Brisbane casino. That failed deal cost The Star AU$10 million ($6.7 million) in fees, with a further AU$31 million ($20.7 million) payment in September.
Meanwhile, FEC and CTFE retained the option to participate in any new tower at The Star’s Gold Coast premises, though they must pay AU$20 million ($13.3 million) if they decline.
The JV Partners also struck an in-principle deal to refinance Queen’s Wharf’s AU$1.4 billion ($933.3 million) debt due in December 2025, with Bally’s Corporation and the Mathieson family’s Investment Holdings giving unconditional consent.
