By Rishav Chatterjee and Shivangi Lahiri
(Reuters) -Star Entertainment, the sale of planned participation of 50% in its seaside resort of Brisbane of 3.6 billion dollars ($ 2.32 billion) failed after its investors based in Hong Kong seeking to leave the joint venture refused to extend the talks, he said on Friday, sending its stocks to a record level.
Buy the highest mortgage prices
The collapse of the queen’s quay marks a major setback for the Australian casino operator, who is on the verge of bankruptcy following a series of regulatory probes in the past two years that have removed customers and left it with a heap of increasing debt.
Star will now have to reimburse investors, the Far East Consortium and Chow Tai Fook Enterprises, $ 41 million, which includes the product and contributions to the actions invested in the project, by September 5 after having failed the consensus on the sale of stakes.
“The parties were unable to achieve an agreement on a number of unanswered business issues,” the Casino operator said in a press release, adding that the partners refused a final effort to extend one week negotiations.
This leaves a star responsible for future contributions to the actions to the project of around $ 200 million, and may need to inject additional equity when the debt ease of the $ 1 billion project occurs for refinancing in December.
The actions of the Australian Casino operator besieged landed more than 17% at their lowest record of 9.1 cents Australian per share earlier in the day. They have been negotiated for the last time at 9.4 cents each, from 0417 GMT.
“The refinancing of the debt of $ 1.4 billion from the DBC (destination Brisbane Consortium, name of the JV) which in December looms as a brand moment for the star, if he can survive so long,” said John Lockton, head of the investment strategy at MST Financial.
“The star’s cash flow continues to wither, and the back and forth on the commitments are only blurring the image.”
($ 1 = 1.5547 Australian dollars)
(Report by Rishav Chatterjee and Shivangi Lahiri in Bengaluru; edition by Harikrishnan Nair and Alan Barona)
