Star Entertainment finalizes deal for withdrawal from Joint Business Partnerships
The Star Entertainment Group has announced a binding agreement to exit its stakes in the Destination Brisbane Consortium (DBC) and Destination Gold Coast Consortium (DGCC) through a two-stage deal.
The first stage, which involves the sale of Star's DBC stake, is set to be completed by 30 November 2025, subject to regulatory approvals, lender consents, and other conditions precedent. The second stage, covering asset transfers related to DGCC and Treasury Brisbane, is expected to conclude in the second half of 2026.
Key conditions of the deal include the release of Star from future equity obligations to DBC, saving over AU$212 million. Star will also be released from a guarantee on the consortium’s AU$1.4 billion debt facility, due for refinancing by December 2025. In addition, Star will receive approximately AU$53 million in cash upfront, including an AU$8 million payment before 28 November 2025. The deal also includes an earn-out of up to AU$225 million in 2030, contingent on consortium performance.
The deal has the backing of Bally’s Corporation and Bruce Mathieson’s Investment Holdings, who provided AU$300 million in emergency funding earlier in 2025 in exchange for a controlling stake, pending probity checks. Final approval from the Queensland state government is still required for the ownership changes.
The context for the exit stems from significant financial strain on Star due to a budget blowout of over AU$1 billion on the Queen’s Wharf Brisbane project, along with mounting debt burdens. Previous attempts to sell stakes in Queen’s Wharf to partners Chow Tai Fook Enterprises and Far East Consortium collapsed due to unresolved commercial issues, leaving Star exposed to large financial liabilities.
The exit arrangement not only alleviates over AU$700 million in liabilities from Star’s balance sheet but shifts over AU$350 million in development costs to consortium partners, providing Star with critical financial relief while requiring a phased, regulated exit process extending into 2026.
The transaction was previously halted due to a failure to reach an agreement on an extension to the deadline. The DBC and DGCC own The Star Brisbane and The Star Gold Coast, respectively. The transaction will see Star dispose of its interest in DBC and include the transfer of other Brisbane assets and interests held by Star to the JV partners.
Last week, talks between the parties ended due to a failure to agree on an extension to the deadline for finalising long-form documentation. However, an agreement was reached on Tuesday. The second stage of the transaction includes the transfer of remaining assets, including DGCC and The Treasury Hotel in Brisbane.
Shares in Star Entertainment Group Ltd. (ASX:SGR) gained over 20% on the news in Sydney Tuesday, but closed Wednesday unchanged at A$0.11 per share. The key aspects of the transaction are consistent with the Heads of Agreement announced in March.
The exit of Star Entertainment from DBC must be completed by the end of November. These conditions include receipt of applicable regulatory approvals, approvals from the Queensland State Government, lender approvals, amendments to DBC facility documentation, release of Star Entertainment's parent company guarantees in relation to DBC, and other required third-party consents.
In light of the financial strain experienced by The Star Entertainment Group, the exit from their stakes in the Destination Brisbane Consortium (DBC) and Destination Gold Coast Consortium (DGCC) is a strategic move aimed at alleviating over AU$700 million in liabilities from their balance sheet. This two-stage deal, which includes the sale of their DBC stake by 30 November 2025 and the transfer of remaining assets, including DGCC and The Treasury Hotel in Brisbane by the second half of 2026, will also shift over AU$350 million in development costs to consortium partners. This significant transaction, backed by Bally’s Corporation and Bruce Mathieson’s Investment Holdings, will also provide Star with critical financial relief in the business and finance sectors.
