SGR ASX: Star Entertainment seals Queens Wharf casino deal with Chow Tai Fook and Far East, avoids administration

Against all odds, Star Entertainment has managed to avoid sliding into administration for now. But its near demise poses bigger problems for a glittering world that risks being consigned to a bygone era. Hong Kong investors Chow Tai Fook Enterprises and Far East Consortium, which each own 25 per cent of the Brisbane complex, had agreed to buy Star’s 50 per cent stake for New Zealand progressive jackpot bonus $53 million. In September last year, Star’s directors started getting advice on «safe harbour» provisions provided by the Corporations Act that would protect them from being personally liable for debts in the event that it cannot stay solvent.
Star also secured a $200 million debt facility to cover some of its short-term financial needs, craps strategy Omaha but this comes with a hefty 13.5% interest rate. Star will have to repay more than $36 million to its consortium partners between now and September, BlackCoin gaming platform but the bigger issue is how it will shoulder its share of future equity contributions and the consortium’s debt. «As noted in the company’s recent ASX announcements, there remains material uncertainty as to the group’s ability to continue as a going concern,» it said. Star Entertainment has narrowly dodged financial collapse with thousands of jobs saved after a US casino giant swooped in to rescue the flailing business.
The published report states that it made a loss before interest, tax, depreciation and amortisation costs of $27 million for the quarter to June 30, on revenue of $270 million. Star said Destination Brisbane Consortium (DBC), in which it continues to hold a 50 per cent equity stake, has a debt exposure of $1.4 billion. It now also remains exposed to $200 million of future equity contributions to DBC due to massive cost overruns at the $3.6 billion resort.
A 2022 NSW inquiry found damning evidence of money laundering and counter-terrorism failings at the groups’ Sydney Crown casino sign up while a 2024 probe found more breaches. The casino group was once worth billions of dollars but has since been slapped with fines totalling more than $210 million and licence suspensions after money laundering allegations. The Star has been in a trading halt since the end of February after being unable to file its half-year financial report without a refinancing plan to save it. Owned by American financier Soo Kim, a self-described corporate fireman, Bally’s specializes in rescuing casinos from financial distress and turning them profitable. The group’s board will now seek for all shareholders to agree unanimously to the deal as it is within their Blackjack best tips interests and will unlock the remaining Bally’s contribution, the ASX statement said. Star is exploring a possible injection of $100 million by its largest shareholder Bruce Mathieson and if this occurs, Bally’s contribution would drop to $200 million.
On Tuesday, a fresh notice showed his shareholding had increased from 5.5 per cent to 6.52 per cent. The following $200 million is subject to a shareholder vote and regulatory approvals. (It might even come in two lots of $100 million, the first after a shareholder vote and the latter after approvals). A proposed long-term funding deal with Salter Brothers last week could not be finalised. The first payment — about $100 million — will be made on Wednesday to allow the operator to stay afloat. Last month it offered Star a $250 million deal and the Australian top online casino sites group wouldn’t even meet with them. Company information displayed on The Australian Financial Review is sourced from Morningstar and ASX and is subject to their terms and conditions as set out in our Terms of Use.