With The Star warning of dire liquidity issues since the beginning of the year, it announced in March that it had reached an in-principal agreement to sell its 50 per cent share of the $3.6 billion Queen’s Wharf precinct in central Brisbane to its co-investors in the project, Chow Tai Fook Enterprises and Far East Consortium.
After missing an initial target of April 30 to get the long form documents in place that would make the sale official, the two buyers issued a notice to terminate the Heads of Agreement (HoA), which is foundational to the sale, at the end of June.
However, a new deadline was set on July 7, when the termination should have taken effect, and negotiations continued. The new deadline was Thursday – July 31.
In a statement to the stock market on Wednesday, outlining its quarterly activities and performance for April to June, The Star said it believed “based on the current status of discussions, it is unlikely that the parties will be in a position to finalise long form documents by 31 July 2025”. At the time of publishing, no statement from The Star has been released contradicting this view.
Unless a different arrangement is reached, if the sale documents weren’t drawn up by the end of July, The Star is on the hook to pay its two precinct co-investors an estimated $36.5 million. Of this, $10 million is due to be handed over by August 6, with the remaining (and estimated) $26.5 million to be paid by September 5.
Other parts of Wednesday’s statement from The Star showed the business continues to lose money, posting a $27 million before tax loss during the last quarter, compared to a $24 million loss in quarter three.
With some serious inflows of cash between April and June – amounting to $291 million – from the sale of its Sydney Event Centre and its acquisition deal with Bally’s and Investment Holdings, The Star reported that it had $234 million in available cash at the end of June.
The Star controls a significant footprint of hotel rooms and event space across its properties in Sydney, Brisbane and The Gold Coast.
