Star Entertainment Group is looking at alternative options for its half-stake in a newly opened Brisbane entertainment complex after failing to reach agreement on a sale it had been negotiating for months.
The embattled casino operator had since March been planning to sell its 50 per cent interest in the Queen’s Wharf Brisbane to its Hong Kong partners, which each hold a quarter-stake in the 12-hectare riverfront development.
The sale price was just $53 million, which the cash-strapped company preferred to sinking another $200 million into the $3.6 billion mega-project.
But Star said on Friday it had been unable to reach a final agreement on a number of commercial issues with Chow Tai Fook and Far East Consortium by Friday’s deadline.
It offered to extend their negotiating framework for another week, but the duo rejected that offer and walked away.
That means Star has until next Wednesday to repay Chow Tai Fook and Far East Consortium a $10 million advance on the sale it received back in March, and until September 5 to repay another $31 million.
Star had $234 million in available cash as of June 30, but in the June quarter it burnt through $9 million a month.
It may lose even more money once stricter limits on wagering with cash come into effect at the Star Sydney later in August.
The limit will fall from $5,000 to $1,000 on August 19, unless NSW regulators agree to a delay.
Star could also be required to sink more money into the Queen’s Wharf development, beyond the $200 million it is estimated to be on the hook for, once the project’s current debt facility expires in December.
Close to midday Star shares were down 2.3 per cent to 10.75 cents.
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