Star Entertainment’s task of staying solvent just got a lot trickier after its equity partners in Brisbane’s Queen’s Wharf casino threatened to walk away from a deal to buy out Star’s interest in the business.
Star announced on Monday that Chow Tai Fook Enterprises and Far East Consortium have given it five days’ notice to terminate the heads of agreement that would have transferred ownership of the Brisbane business to them for $50 million and hand Star ownership of properties at the Gold Coast casino.
A rescue deal from Bally’s Corporation chairman Soo Kim is keeping Star afloat for now.Credit: Dominic Lorrimer
“Despite the receipt of this notice, The Star remains willing to continue negotiations with the joint venture partners to give effect to the [transaction],” Star said.
Last week, Star shareholders approved a $300 million rescue deal from US suitor Bally’s and pokies billionaire Bruce Mathieson, who will tip in $100 million as part of the rescue.
Earlier, Star’s lawyers told a Federal Court hearing that it might not survive a penalty for money laundering failures if financial crime watchdog AUSTRAC succeeds with a proposed $400 million penalty. Star said there was no certainty it could fund a $100 million fine, which it said was more appropriate.
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The court has yet to hand down its decision.
Star has been embroiled in a spiralling financial crisis since last year as gambling revenue fell and regulatory costs mounted following a run of scandals – including revelations it facilitated money laundering and allowed organised crime to operate on its premises – which led to the loss of all three casino licences.
Star announcement of the Brisbane deal in March, helped the casino operator avoid financial collapse. The consortium partners offered to pay $53 million for Star’s 50 per cent share. Star was also to receive $5 million a month to run the casino, rising to $6 million a month as of next year.
