With two deadlines having passed to finalise the details of the sale of its stake in Queen’s Wharf to its project partners, Chow Tai Fook Enterprises and Far East Consortium, The Star announced on Friday that the two buyers refused a proposal to extend the negotiating period by another week.
So, for now, The Star retains its interest in Queen’s Wharf and its one third ownership of The Star Gold Coast, which it had been in line to take full control over had its Queen’s Wharf divestment gone to plan.
As part of the termination of the Heads of Agreement (HoA) that was foundational to the sale and took effect on Friday, The Star is now required to repay $10 million of the $45 million it has received from its Queen’s Wharf co-investors since the sale process began.
The Star must also pay around $31 million of equity payments to the Queen’s Wharf development, representing its share of the payments that it has not been making since the end of March, following the beginning of negotiations to exit its investment.
If The Star cannot make either of these payments, it will hand over its one third share of the Dorsett Hotel at The Star Gold Coast to its co-investors.
However, The Star is also in line to be reimbursed by Chow Tai Fook Enterprises and Far East Consortium for their shares of equity contributions to The Star Gold Coast since March 7, with The Star expecting to receive around $1 million.
The failure of the sale means The Star is back on the hook for future equity payments for the still in-development Queen’s Wharf, which it says are around $200 million.
Last week, the business announced its performance for the final quarter of the 2024-2025 financial year, which revealed ongoing losses and that The Star had $234 million in liquidity at the end of June, following an influx of cash over the quarter, due to its sale of its Event Centre in Sydney and the partial acquisition of the company by Bally’s and Investment Holdings.
The Star, which has been warning of dire liquidity since the start of the calendar year, says it is “considering what alternative options may be available to it in relation to its 50 per cent equity interest in DBC”.
