The Australian gambling giant Star Entertainment Group, mired in a debt crisis, has reached a critical turning point as its Hong Kong partners, Chow Tai Fook Enterprises and Far East Consortium, agreed to extend the deadline for the Brisbane Queen's Wharf casino transaction to July 31, allowing more time for negotiations.
The project, with a total investment of AUD 3.6 billion, is developed and operated by the tripartite joint venture Destination Brisbane Consortium (DBC). Star originally held a 50% stake and planned to sell all its shares to the two Hong Kong partners in exchange for AUD 56 million in cash and a 33% stake in the high-end apartment and hotel projects Dorsett and Andaz on the Gold Coast, thus achieving full control of these two buildings.
However, Star had previously warned that the transaction might terminate, causing severe fluctuations in its stock price. Now, the extension decision by the Hong Kong side keeps hope alive for the deal. But Star also noted that if the agreement is not completed by July 31, it will have to return the AUD 10 million already paid by the Hong Kong side and repay the remaining AUD 26.5 million investment within 60 days, totaling AUD 36.5 million (about USD 23.9 million), undoubtedly increasing its financial burden.
According to an announcement submitted to the Hong Kong Stock Exchange by Far East Consortium on July 7, the three parties had intensive consultations over the past week, focusing on details such as the transition of management rights, to ensure a smooth handover of the project and avoid market disruptions due to uncertainties.
If the transaction fails again, Star's newly approved AUD 300 million financing plan could be severely impacted. This financing is led by Bally's Group, whose chairman Soo Kim has explicitly expressed the desire to preserve the integrity of Star's core assets in Sydney, the Gold Coast, and Brisbane.
But Star faces even more severe potential risks. The Australian anti-money laundering regulator AUSTRAC may issue a hefty fine, and if the penalty is too high, it could potentially force Star into bankruptcy, rendering all efforts to save itself futile.
Currently, Star is fully pushing forward with the final agreement with the Hong Kong side. If the transaction is successfully completed, the company will completely exit the Brisbane project in exchange for cash and real estate assets as compensation. July 31 may become a watershed moment in the fate of this gambling giant.
