Star Entertainment's Brisbane casino deal implodes; shares tank
Shares in the embattled Australian casino operator fell as much as 9.1% to A$0.10, hitting their lowest level since May 5, and were set for their biggest single-day percentage drop since June 23.
The collapse of the Queen's Wharf deal marks a major setback for Star, which — alongside its Hong Kong partners — has poured in significantly more capital than initially expected to complete the project. The development is now burdened with around A$1.4 billion in debt.
The firm is now urgently weighing its options for the 50% stake in Queen's Wharf after efforts to finalise long-form deal documents broke down.
A last-ditch request for an extension was rejected by the Hong Kong partners, who also jointly own two-thirds of Star's Gold Coast casino and each hold 2.8% of the company.
"The parties have been unable to reach agreement on a number of outstanding commercial issues which in turn prevent the finalisation of long form documents," Star said in a statement.
But the failed deal carries costs. Star must repay A$10 million by August 6 and reimburse its partners about A$31 million by September 5 for past equity contributions.
Originally announced in March, the now-defunct deal gave Star control of two towers on the Gold Coast and unlocked a critical A$53 million funding lifeline, seen as vital to keeping the company afloat.
Queen's Wharf is the newest addition to Star's trio of integrated resorts and is backed by its Hong Kong shareholders.
($1 = 1.5547 Australian dollars)
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