Star Entertainment’s efforts to salvage a deal to sell its stake in Brisbane’s Queen’s Wharf precinct have stalled, with the company warning it could be hit with a near A$37 million penalty if the transaction falls through.
The embattled casino operator told the ASX on Monday that negotiations with joint venture partners Chow Tai Fook Enterprises and Far East Consortium have been extended to the end of July, after a deal agreed in March to offload its 50% interest faced collapse.
Chow Tai Fook and Far East Consortium — which already own 25% each of the Queen’s Wharf development — had threatened to walk away from the agreement, which includes the Treasury Hotel and carpark, citing concerns reportedly centred on Star’s wish to remain casino operator.
If no agreement is reached by 31 July, Star will be required to repay A$10 million already received from the buyers and forfeit a further A$26.5 million in equity contributions.
Star confirmed the parties had “agreed to a new set of principles” and that there would be “certain departures from the heads of agreement.”
“The Star will provide an update if there are further material developments with the respect to its negotiations with its joint venture partners, including any material changes to the (heads of agreement) which are agreed as part of the long form documents,” it said.
The update comes amid strike action at the Brisbane casino, where hundreds of workers walked off the job on Friday during an enterprise agreement dispute.
Star shares remained unchanged at 13¢ on Monday.