【Casino Unibet】Star Entertainment unloads Queen's Wharf stake for a loss

The struggling casino operator has offloaded its share to Far East Consortium and Chow Tai Fook, both of which are joint venture partners in the broader Queen’s Wharf development in Brisbane.

Far East Consortium disclosed the deal to the Hong Kong Stock Exchange (HKEX) today (7 March), stating that it and Chow Tai Fook would jointly acquire The Star’s stake in the A$3.8bn Queen’s Wharf project for A$53m in cash.

The payment will be structured in tranches, with an initial instalment of A$35m to be paid in the coming days.

As part of the transaction, Far East Consortium will also transfer its 66.7% equity interest in The Star casino at Broadbeach on the Gold Coast back to The Star Entertainment Group.

The sale followed a day of conflicting reports. Earlier today, Star publicly denied media speculation that it had secured a buyer for its stake in Destination Brisbane Joint Venture, the entity responsible for The Star Brisbane integrated resort.

However, Far East Consortium later confirmed to the HKEX that it had reached an agreement to acquire the stake, thus securing full ownership of the Queen’s Wharf precinct.

As part of the arrangement, The Star Entertainment Group has agreed to terminate its casino management agreement but will continue providing management services for a fixed monthly fee.

This fee is set at A$5m per month until June 2026, after which it will increase to A$6m per month.

The deal aligns with The Star’s earlier announcement in February that it was negotiating with Chow Tai Fook and Far East Consortium to sell its stake in the Brisbane casino and resort.

More trouble may lie ahead

Despite the sale, financial struggles continue to plague all parties involved in the development. Chow Tai Fook and Far East Consortium have faced difficulties after contracts for their 800-unit Queen’s Wharf Residences were cancelled.

The terminations were driven by unanticipated cost surges and supply chain disruptions, leading the developers to impose a 12.5% price hike on apartments that had largely been sold soon after their 2022 launch.

Star has been grappling with a deepening financial and reputational crisis. In late February, the company admitted that it was actively exploring ways to secure new liquidity.

The company’s financial troubles have been compounded by a series of regulatory investigations, operational setbacks, and declining investor confidence.

One major investigation is still underway and, as more wrongdoing is being uncovered, Star faces even more financial headwinds.

As part of its asset sell-off strategy, The Star sold The Treasury Building in Brisbane to Griffith University for A$67.5m last year. However, even with such divestments, the company remains on a precarious financial footing.

It has yet to finalise and release its half-year financial report to the Australian Securities Exchange (ASX), citing ongoing liquidity negotiations and material uncertainty regarding its ability to continue operating as a going concern.

The Star’s struggles have led to significant market repercussions. Trading of its shares has been suspended since 1 March, and the delay in its financial reporting has only intensified concerns about its solvency.

Insolvency firm FTI has reportedly been briefed to take over management of the company should it enter administration.