Star Entertainment’s DBC Exit in Peril as Partners Seek to Terminate the Arrangement

The Star Entertainment Group has published an update related to its earlier decision to exit its equity interest in Destination Brisbane Consortium (DBC). The company noted that since the conditions of its binding heads of agreement (HoA) were not met, its joint venture partners have submitted a notice to terminate the arrangement.

The Star’s Partners Seek to End the HoA

In March, The Star penned a binding HoA with its joint venture partners, Chow Tai Fook Enterprises Limited and Far East Consortium International Limited, outlining the planned sale of its interest in DBC. The Star’s goal was to consolidate its position on the Gold Coast.

The arrangement, however, was subject to long-form documents being entered into and the satisfaction of other conditions. Some of these conditions were not met since The Star and its joint venture partners failed to submit important documents by the April 30 deadline.

Due to that, each party was allowed to terminate the HoA if they provided five business days’ written notice to the other party. While The Star had continued to negotiate with its partners, hoping to finalize the agreement, its partners have now decided to terminate the HoA.

On June 30, The Star received a notice to terminate the agreement. The motion will become effective in five business days unless withdrawn.

In response, The Star said that it remains willing to continue the negotiations with its joint venture partners, hoping to get the DBC transaction approved. The Australian casino giant promised to publish an update upon any further developments related to its negotiations and the potential termination of the HoA.

The Star Receives Event Centre Proceeds, Secures Millions from Bally’s

In the meantime, The Star announced that it has received the AUD 58 million from the sale of its Event Centre, following the release of these proceeds from escrow.

In addition to that, The Star confirmed that it has received AUD 133 million in funding from Bally’s Corporation and Investment Holdings. This follows the recent shareholder approval which enabled the realization of Bally’s AUD 300 million lifeline.

Under the proposal, Bally’s and Investment Holdings have committed to invest AUD 200 million and AUD 100 million, respectively. The Star, in turn, has promised to issue 278,517,860 convertible notes to Bally’s and 139,258,930 convertible notes to Investment Holdings.