Just as it looked as though The Star Entertainment Group wouldn’t be able to exit the Queen’s Wharf Brisbane project, a lifeline has been handed to the Australian casino operator. The Star has reached an extension to the termination date of its binding heads of agreement (HoA) with its Joint Venture Partners, Chow Tai Fook Enterprises Limitedand Far East Consortium International Limited (Joint Venture Partners) which relates to its ownership interests in the Destination Brisbane Consortium (DBC), the Destination Gold Coast Consortium (DGCC) and other assets.

Last week, it was announced that the operator had been given a five-day notice by the Joint Venture Partners that the HoA would be terminated on 7 July. 

The HoA was subject to the execution and fulfilment of long-form agreements and the fulfilment of certain conditions. Since the initial deadline of 30 April had passed without an agreement being found, each party became entitled to terminate the HOA by providing five business days’ written notice, a move exercised by Joint Venture Partners.

However, updating its investors, the operator has revealed that an agreement has been reached on a set of principles between all parties, under which there will be certain departures from the HoA. These are subject to the parties now progressing through negotiations to finalise the long-form documents. As such, the revised termination date for the HoA has been extended until 31 July 2025.

Initially, The Star had planned to divest its 50% stake in the DBC to help consolidate its position on the Gold Coast for a fee of AUD $53m.

If an agreement had been reached prior to the initial deadline, the operator wouldn’t be required to make equity contributions, set to be AUD $212m, on a substantial debt obligation of AUD $1.4bn. It would also have acquired two hotels from its Gold Coast joint venture partners.

In the latest update, The Star has stated that what the extension means is that the HoA’s provisions will “remain on foot” while negotiations between the parties on the long form documents continue. 

However, the operator will be obliged to make two payments to the Joint Venture Partners if the revised termination date passes without the long form documents being entered.

The first payment would be repaying AUD $10m in proceeds it received from the Joint Venture Partners, an amount payable within 30 days of today’s date (7 July).

The second payment is that the Joint Venture Partners would be reimbursed by The Star for its share of equity contributions that have been made by the Joint Venture Partners to DBC since 31 March 2025, which is currently expected to be approximately AUD $26.5m, payable within 60 days of today’s date.

An update will be provided by The Star should there be any further material developments regarding its Joint Venture Partners negotiations, such as any HoA material changes which are agreed as part of the long-form documents.

What isn’t clear, however, is the impact another breakdown in negotiations could have on The Star’s strategic investment from Bally’s Corporation and Investment Holdings, which has an aggregate principal value of AUD $300m (approximately USD $195m) and was approved by the operator’s shareholders last month.

Before voting took place, The Star’s Chair, Anne Ward, told shareholders that the uncertainty regarding the operator’s ability to continue is a “going concern, amid a challenging operating environment”, and other claims, including its civil proceedings judgment launched by AUSTRAC that concluded on 11 June.

Ward noted that the Bally’s and Investment Holdings investments would help to avoid potential voluntary administration as they “provide cash funding and assist The Star’s ability to continue as a going concern”.

The Star’s Chair also mentioned the evaluation of its appointed independent expert, Grant Samuel, who concluded that while each of the investments is “not fair”, shareholders would still “be better off” if these investments proceeded.

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