Struggling Star Entertainment Secures Multi-Million Deal for Stake Sale
Star Entertainment Group has reportedly finalized a deal to sell its 50% stake in Brisbane’s Queen’s Wharf precinct to Hong Kong investors and secure $50 million for the company, which has been facing severe financial difficulties.
LISTEN TO THIS ARTICLE:Reports appeared early on Friday suggesting that Star was close to an agreement to sell its stake to Far East Consortium and Chow Tai Fook, which already hold 25% each of the development.
The deal follows weeks of negotiations after Star had previously rejected multiple offers from the investors due to disagreements over key terms. However, by Friday afternoon local time, local press was reporting that Star had officially signed the agreement.
Government Approval Still Needed
The transaction is subject to approval from the Queensland Government. Star is expected to confirm the agreement with shareholders later on Friday.
Earlier in the day, the company informed shareholders it had been in discussions with its Hong Kong-based partners, referred to as “Joint Venture Partners”, but had yet to reach a final agreement.
Star’s financial troubles have been rapidly growing in recent days, which prompted a desperate search for cash. Earlier this week, Star entered a trading halt after failing to release its half-year financial results by last Friday’s deadline.
The casino operator admitted it was “unlikely” to publish its financials unless it could secure a funding package that would refinance its existing corporate debt and provide additional liquidity.
Additionally, CEO Steve McCann has reportedly been trying to unlock $60 million from the sale of Star’s Sydney events center, which remains in escrow. While the company did not directly address this in its Friday update, it referenced “recent media speculation” regarding financial matters.
In January, Star announced it had sold the venue, previously valued at $100 million, to Foundation Theatres, which could help stabilize its financial position once finalized.
More Business News
Star’s Mounting Debt Problem
Star currently owes approximately $430 million to various lenders and is also facing hefty penalties from AUSTRAC.
Furthermore, the company is currently paying around 16% in interest on its loans and administration could cost the company as much as $300 million.
However, there are still potential funding options. Hospitality magnate Bruce Mathieson’s company previously made a $550 million bid for Star’s Gold Coast Jupiter’s Casino, which was rejected but remains on the table.
Queensland coal tycoon Chris Wallin has also reportedly offered a $200 million bridging loan to help Star buy time for a turnaround.
Another option is a $650 million funding proposal from U.S.-based Oaktree Capital Management. However, there have been reports that this deal is at risk. Oaktree reportedly wants rights over the Sydney casino property, owned by the NSW government, which could pose a major problem as many believe that the government would rather let the Star go into insolvency and then deal with the administrators.
RELATED TOPICS: Business
Latest News
Most Read
Must Read
Interviews
Sweepstakes Casinos: Thriving in an Ever-Changing Industry – Interview with Attorney Stephen C. Piepgrass
Feb 17, 2025
Interviews
Review this New Post
Leave a Comment
User Comments
Comments for Struggling Star Entertainment Secures Multi-Million Deal for Stake Sale