Star Entertainment’s Brisbane casino deal will collapse. Stocks have lowered records
Rishav Chatterjee and Shivangi Lahiri
(Reuters) – Star Entertainment’s planned 50% stake sales have failed the $3.6 billion ($2.32 billion) Brisbane Resort. Hong Kong-based investors refused to extend talks and sent stocks on record on Friday as they were about to leave the joint venture.
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The collapse of the Queensworf deal marks a major setback for Australian casino operators. Australian casino operators are on the brink of bankruptcy following a series of regulatory investigations over the past two years, ousting customers, fitting them in debt.
Star will need to repay investors, Far East Consortium and Chautai Hook Enterprises ($41 million).
“The parties were unable to reach an agreement on many notable commercial issues,” the casino operator said in a statement, adding that the partners have rejected final groove efforts to extend negotiations up to a week.
This will allow Star to be responsible for future stock contributions to the approximately $200 million project, and may need to inject additional stock if the project’s project debt facility appears for refinancing in December.
The stocks of Australian casino operators that fought tanked more than 17% to a record low of 9.1 cents per share early in the day. They were trading last at 9.4 cents each at 0417 GMT.
“The $1.4 billion debt refinance for DBC (Destination Brisbane Consortium, JV) scheduled for December is looming as a star’s make-up or break-off moment if it can survive for a long time.”
“The star’s cash flow continues to wither, and we just have to repeatedly shoot up and down the commitment.”
($1 = 1.5547 Australian dollars)
(Reporting by Rishav Chatterjee and Shivangi Lahiri of Bengaluru, edited by Harikrishnan Nair and Alan Barona)