The Star Entertainment Group (ASX: SGR) has announced the termination of its binding Heads of Agreement (HoA) with joint venture partners Chow Tai Fook Enterprises Limited and Far East Consortium International Limited, effective today. The Star Entertainment Group owns and operates casinos and entertainment facilities. The HoA concerned The Star’s ownership interests in the Destination Brisbane Consortium (DBC), Destination Gold Coast Consortium (DGCC), and other related assets.
The termination follows unsuccessful negotiations to finalise long-form documents. Despite The Star proposing an extension to the termination date until August 6, 2025, the Joint Venture Partners did not accept the extension. As a result of the termination, The Star will retain its 50% equity interest in DBC and its one-third equity interest in DGCC. It will also retain the Treasury Brisbane hotel and car park, as well as its 50% equity interest in the Charlotte Street Car Park (Festival).
The termination triggers several financial obligations for The Star, including the repayment of $10 million to the Joint Venture Partners by August 6, 2025. Additionally, The Star must reimburse the Joint Venture Partners approximately $31 million for their share of equity contributions to DBC since March 31, 2025, payable by September 5, 2025. Conversely, the Joint Venture Partners are required to reimburse The Star approximately $1 million for their share of equity contributions to DGCC since March 7, 2025.
The parent company guarantee related to The Star’s 50% share of the DBC debt facility remains in place. The Star will continue to be responsible for its share of future equity contributions to DBC, estimated at approximately $200 million. The Star is currently considering alternative options for its 50% equity interest in DBC, along with the Treasury Brisbane hotel and car park, and its 50% equity interest in the Charlotte Street Car Park (Festival). The company will provide updates on any material developments.