Joint Venture Relief for Star as Negotiation Period Extended
Star will now have until July 30 to negotiate its exit from the joint venture.
Star Entertainment Group has been given more time to negotiate an exit from its Queen’s Wharf joint venture in Brisbane with Chow Tai Fook Enterprises and Far East Consortium.
Concerns were raised in late June when its partners in the venture issued notice to terminate the binding heads of agreement (HoA) that outlined the deal. This had been due to take effect on July 7.
However, updating the market, Star said it had reached an agreement to extend this period. Instead, the HOA termination date will be set at July 30, giving Star an additional three weeks.
Star Still Liable for Certain Payments
This extension is based on the provisions of the HoA remaining on foot while negotiations continue between the parties. However, Star is still obliged to make certain payments should long-form documents not be filed in time.
First, Star must repay AU$10 million (US$6.5 million) of proceeds it received from the joint venture partners. This would be payable within 30 days of the initial July 7 deadline.
Star would also be liable for reimbursing the partners for its share of equity contributions made by the other two parties since March 31. This is currently anticipated to be $26.5 million and payable within 60 days of the initial deadline.
“We will provide an update if there are further material developments with respect to its negotiations with its joint venture partners, including any material changes to the HoA which are agreed as part of the long-form documents,” Star said.
The Queen’s Wharf Brisbane development is due to open later this year. Though regarded as a flagship integrated resort, the project has faced several delays.
