Australia’s Star Entertainment will get A$53 million ($33.41 million) in cash in a deal that includes selling stake in a Brisbane complex to its Hong Kong partners, providing a lifeline that will for now keep the casino operator from falling under.
Cash-strapped Star has been under immense pressure to avoid voluntary administration and is seeking critical funding to stabilise its finances.
Star is selling its 50% stake in Brisbane’s Queen’s Wharf precinct to its Hong Kong partners Far East Consortium International and Chow Tai Fook Enterprises.
The company is due to receive the first tranche of the A$35 million by the end of the day, Far East Consortium said on Friday.
For years, Star and larger rival Crown Resorts, owned by Blackstone, have faced multiple inquiries into violations of anti-money laundering rules and subsequent legal actions.
Star has poured millions of dollars into compliance upgrades and new systems to restore its battered reputation and secure casino licences. Those costs and weaker consumer discretionary spending have hit the firm hard.
Earlier this week, Star said it would delay the release of its interim financial results until a rescue financing package was secured, with its shares remaining suspended from trading.
After the deal, Far East Consortium and Chow Tai Fook Enterprises will become the sole owner of the Brisbane venture, which has luxury hotels and restaurants and other amenities.
Star will, in turn, acquire the investors’ 66.67% stake in the Gold Coast project in Queensland.
The deal value is below the dollar threshold to automatically require foreign purchasing approval.
However, Far East Consortium said it agreed to the deal on condition that it cleared regulatory hurdles, including consent from the Queensland state government and any required approvals under Australia’s Foreign Acquisitions and Takeovers Act 1975 (Cth).
Star did not immediately respond to a Reuters’ request for comment on the deal.
Representatives of the Queensland government and Foreign Investment Review Board (FIRB) were not immediately available for comment.
Reuters
