Star Suffers Another Blow as Treasury Brisbane Sale Collapses

Summary:

• Treasury Brisbane’s sale to Charter Hall will no longer proceed, The Star revealed
• Charter Hall terminated the negotiations after conditions were not satisfied by the relevant date
• The collapse of the transaction poses another big challenge for The Star as it faces a major tax hike in NSW

The Star Entertainment Group has revealed that Charter Hall Group has backed out of a proposed transaction to acquire Australian casino Treasury Brisbane. In a recent filing to the Australian Securities Exchange, the casino operator disclosed that the transaction collapsed as the conditions set out in the agreement had not been met within the relevant time frame.

Treasury Brisbane Sale and Leaseback Transaction Collapses

Under the deal initially announced in October 2021, Charter Hall, an Australian property development and funds management company, would purchase Treasury Brisbane for AUD248 million (US$168.7 million). The sale will include the Treasury Casino and Treasury Hotel along with the Queens Gardens car park. The agreement would also allow The Star to lease back the Queensland property for an initial term of 30 years.

That will no longer happen after Charter Hall decided not to extend the dates for satisfaction of the conditions, effectively terminating the negotiations, according to The Star’s filing. The company said it’s now considering its options on the matter.

The Star had initiated a sale and leaseback transaction for Treasury Brisbane as it prepares to launch its newest property in Australia, Queen’s Wharf Brisbane.

The casino resort is a joint venture between The Star and Hong-Kong based companies Far East Consortium International Ltd and Chow Tai Fook Enterprises Ltd. The development was initially scheduled to open in December 2023 but The Star announced in early June that the opening date was postponed to April 2024 citing the current construction progress.

NSW Casino Tax Hike Put on Hold

The collapse of The Star’s transaction with Charter Hall deals another blow to the casino operator which has been seeing a decline in revenues since it was subject to money laundering inquiries in the Australian states where it operates. During the first half of the 2023 financial year, The Star reported a $1.26 billion loss, arising from fines and regulatory changes.

Its Sydney casino in particular has suffered huge losses driven by new measures and operational requirements for casino operators introduced in New South Wales (NSW). Increased competition from the launch of its rival casino Crown Sydney also contributed to the losses.

A proposed gaming revenue tax increase in NSW presents yet another big challenge for The Star, though the new changes, originally scheduled to take effect from July 1, have been put on hold as the new NSW government continues to engage with casino operators on the planned tax hike.