Star Seeks Buyer for Brisbane Casino Stake to Stay Afloat
Star Entertainment Group Ltd. has entered into negotiations with its Hong Kong-based partners to offload its stake in its Brisbane complex.
LISTEN TO THIS ARTICLE:According to The Australian Financial Review, Star is in discussions with partners Chow Tai Fook Enterprises Ltd. and Far East Consortium Ltd. to sell its 50% interest in the controversial Brisbane development, a project saddled with A$1.6 billion in debt and still requiring hundreds of millions of dollars to reach completion.
However, Star revealed in a statement today that despite receiving multiple proposals from its partners, none of them have met its valuation expectations. The company stated that it will carry on talks with its partners to secure a satisfactory deal amid ongoing struggles with its financial stability.
The cash-strapped Australian casino operator is racing against time to raise vital funds, having warned last month that its very existence is under threat due to a severe liquidity crisis. It is looking to raise A$100 million subordinated debt to access an additional A$100 million borrowing facility.
Star also noted that its ongoing discussions may not yield a definitive agreement that “will result in one or more definitive arrangements that might materially increase the group’s liquidity position.” Without a successful resolution, the group cautioned that its ability to continue operating is uncertain.
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Scandal and Slowing Revenue
Star is battling to recover from the impact of an investigation into wrongdoing within its operations, compounded by a decline in local gaming revenue as Australian consumers feel the pinch of rising living costs.
Although the group negotiated a loan extension with its creditors last September, its current financing alternatives have dwindled.
In the same month, the company published its annual results, revealing a multibillion-dollar loss for the second consecutive year. To raise more funds, Star also announced its plan to sell A$300 million worth of non-core assets.
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