The largest amongst the developments was a deal The Star has made with its co-investors in the $3.6 billion Queen’s Wharf development in Brisbane, which will see The Star exit the precinct in return for taking full ownership of The Star Gold Coast.
The Star currently has a 50 per cent stake in Queen’s Wharf, and expected to pay at least $212 million more towards the precinct, which is not yet complete.
The Star also owns a third of the two new towers at The Star Gold Coast – tower one, which houses Dorsett Gold Coast and apartments and an under-construction second tower which will include Australia’s first Andaz hotel from Hyatt alongside more apartments.
Under Friday’s deal, The Star will hand over its Queen’s Wharf stake to Chow Tai Fook Enterprises and Far East Consortium, who own the rest of the development in equal proportion, and they in turn, will hand over their stakes in the two Gold Coast towers, of which they each own a third.
This agreement means The Star’s brand will likely exit Queen’s Wharf, where it currently runs the casino, The Star Grand and The Event Centre. The Star has outlined a transitional period which lasts until May 31, 2026, in which it will continue to operate the casino at Queen’s Wharf. The transition period may be extended.
As part of the deal, The Star will also hand over The Treasury Hotel in Brisbane.
Financially, The Star will receive $5 million per month to continue operating the casino during the transitional period and $6 million per month if that period is extended. The business also has the potential of a maximum $225 million earnout related to Queen’s Wharf while being released from the $212 million it expected to pay towards the precinct. In addition Chow Tai Fook Enterprises and Far East Consortium will pay The Star $53 million, including $35 million on Friday last week and $10 million by the end of the month.
“This transaction is an important milestone for the company and contributes to providing a potential pathway towards financial viability,” said The Star’s CEO and managing director, Steve McCann.
“Our team has worked hard to deliver The Star Brisbane and establish a new precinct for Brisbane. We are grateful for the efforts of all of our employees and we will work with our joint venture partners and the regulator to transition to a new casino operator in due course.”
“We are excited about our future in the Gold Coast. We will have almost 1,200 hotel rooms at the Gold Coast following the opening of the five-star Andaz Hotel in late 2025 and believe that once we optimise these operations and our strategy, our full ownership of these hotels will enhance our integrated offering and provide an opportunity to improve the performance of the business.
“The receipt of cash funding will provide additional support in the near-term as we focus on putting in place additional liquidity measures and seek to implement a whole of company refinancing.
“This transaction is a step in the right direction for The Star. There are still a number of challenges that we need to address, including progressing short and long-term liquidity for the company. We remain focused on the remediation of the business and restoring our reputation as a suitable licensee at both The Star Gold Coast and The Star Sydney.”
In a statement, executive director and joint managing director of Far East Consortium, Wendy Chiu, said the company “is committed to Queen’s Wharf Brisbane, its employees and the state of Queensland”.
On Friday The Star also announced it had secured a $250 million bridging loan from King Street Capital Management as it seeks to refinance the rest of the company’s debt.
Also on Friday, The Star said it had entered into an exclusivity and process deed to secure up to $940 million in further debt capacity from an unnamed lender. However, this deal is not yet certain and The Star reported on Monday morning that it had received another funding offer from Bally’s Corporation, which runs a number of casinos in the US.
“While there is more to do to have access to the funding from the bridge facility and the refinancing proposal, these initiatives, together with the agreement to exit Destination Brisbane Consortium and expand our operations at the Gold Coast, improve our capacity to have a viable future, both for the company and its stakeholders,” said McCann on Friday, before the receipt of the proposal from Bally’s.
“We are now focused on implementing these proposals, including continuing our engagement with governments, regulators and existing lenders to seek their support for our plan. We also remain focused on implementing our plan to restore our licences.
“The company still faces various risks, including the availability of funding, the ability to restore our licences (including implementing our remediation plan and various regulatory reforms relating to carded play and cash and time limits), maintaining support from stakeholders, resolving the various litigation and claims from historical issues and managing the business in a period of continuing lower revenue and negative cashflow,” said McCann.
The Star has been flagging an existential lack of cash in the business since early January and, at the end of February, said it would likely not be lodging its financial results until it had found a solution to its liquidity issues. The delay in publishing results has, in turn, caused the company to be suspended from trading on the Australian stock exchange.
A number of the arrangements announced on Friday are subject to probity and regulatory approvals.
