Star seals deal to sell Queen’s Wharf casino to HK partners

Struggling casino operator Star Entertainment has rescued a deal to offload its troubled Brisbane resort to the Hong Kong-based business partners in this venture.

The publicly listed company has been locked in negotiations over plans to sell its 50 per cent stake in Brisbane’s Queen’s Wharf casino to Chow Tai Fook Enterprises and Far East Consortium, as it scrambles to reduce debt and survive a financial crunch.

Star had been unable reach an agreement with the parties before a key deadline two weeks ago, but on Tuesday it said it had entered into a $53 million binding deal.

The deal will mean Star sells its share of Brisbane’s Queen’s Wharf casino to Chow Tai Fook Enterprises and Far East Consortium and hand Star ownership of properties at the Gold Coast casino.

The partners will take over Star’s 50 per cent share after previously holding 25 per cent shares.

“The transaction involves The Star disposing of its interest in DBC [the owner of Queen’s Wharf], consolidating its position at the Gold Coast and transferring other Brisbane assets and interests held by The Star to the joint venture partners,” Star’s ASX announcement said.

Joint managing director of the Far East Consortium Wendy Chiu said the deal was a major milestone for the Queen’s Wharf casino, and the agreement would safeguard about 2700 jobs.

“Far East Consortium is delighted that, together with our strategic partner Chow Tai Fook Enterprises, we have been able to reach binding formal agreements with The Star that will enable us to keep the doors open and safeguard thousands of jobs in the heart of Brisbane’s CBD,” Chiu said in a statement.

“As Brisbane prepares for the 2032 Olympic and Paralympic Games, we remain steadfast in our resolve to ensure QWB delivers lasting value for the people of Queensland.”

The deal has been approved by US group Bally’s Corp which had previously offered $300 million to save the group from appointing administrators.

It will be completed in two stages with the exit from Queen’s Wharf first and a sunset date of November 30.

Plans to sell its 50 per cent interest in the Queen’s Wharf had been ongoing since March for the embattled casino operator.

As recently as August 1, the Hong Kong partners rejected a $53 million sale as the parties were unable to reach a final agreement on a number of commercial issues.

Star had $234 million in available cash as of June 30, but in the June quarter it burnt through nearly $25 million a month in operations.

Star blamed the loss on an “ongoing challenging operating environment” including the impact of mandatory carded play and cash limits in NSW, and stricter regulatory requirements across all its properties.

Star’s financial position improved considerably in the last quarter, however, after it received a total of $233 million from US gaming giant Bally’s and billionaire pub baron Bruce Mathieson as part of a $300 million rescue deal.

The mega $2.6 billion riverfront Queen’s Wharf precinct staggered its opening since the Star Grand Hotel began operating in August 2024.

Star is also selling a Brisbane hotel and car park at its Treasury complex, and a 50 per cent stake in a car park in Charlotte Street, Brisbane. Remaining assets included in the transaction, such as the Treasury Hotel in Brisbane, are subject to a separate set of conditions to be finalised in the second half of 2026.

The transaction means Star will not be required to fund any equity contributions to the Queen’s Wharf project. If it had not entered the deal, it expected these contributions would have been at least $212 million.

Star will also be released from its guarantee over a 50 per cent share of the project’s debt facility.

Star could lose even more money once stricter limits on wagering with cash come into effect at its Sydney casino later in August.

The limit will fall from $5000 to $1000 on August 19 unless NSW regulators agree to a delay.

Financial crimes watchdog AUSTRAC is also seeking a $400 million penalty against Star for letting VIPs launder dirty money at its casinos.

Star says a fine of that magnitude would send it into insolvency.

Star shares surged on Tuesday, up 23.5 per cent, to close at 11¢.

As recently as 2022, Star shares had traded as high as $3.25.

With AAP

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.