Chow Tai Fook of Hong Kong, FEC buys out Star’s Brisbane Casino Complex (19459034)
CTFE and FEC take full control of Queen’s Wharf Brisbane.
Hong Kong investors Chow Tai Fook Enterprises (CTFE) and Far East Consortium (FEC) will acquire the remaining 50 percent stake they don’t own in Star Entertainment’s Queen’s Wharf Brisbane casino complex, bringing a lifeline of liquidity to the cash-strapped Australian casino group.
CTFE and FEC, the holding company of New World Development chairman Henry Cheng and the Chiu Family’s FEC, will pay A$53,000,000 ($33.4,000,000) in cash to Star. According to a Friday filingThe Hong Kong partners complete the asset swap with their 66.67 % interest in two Gold Coast Hotel Projects.
Brisbane’s Star was expected to get an initial A$35 million tranche on Friday. The infusion comes two months after the ASX-listed group disclosed that its available cash fell 47 percent in the three months to 31 December, clouding its future as it faced an impending fine for breaches of counter-terrorism and anti-money-laundering laws.
In the filing, FEC stated that “each party must cooperate and take all reasonable measures to satisfy or ensure satisfaction of the pre-conditions and complete the proposed transactions in accordance with applicable laws and regulations.” The target completion date for the transaction is 30 June 2025. The final deadline will be 30 November 2025 unless otherwise agreed by The Star and JV partners in writing.
Henry Cheng is increasing his bets on Aussie casinos.
Star has also agreed to terminate the management contract for Queen’s Wharf Brisbane, but will continue to operate for a period of transition until March 2026. Steve McCann, CEO of Star, called the transaction an “important milestone” that could help Star achieve financial viability. McCann stated in a press release that “our team has worked hard” to deliver The Star Brisbane, and establish a precinct in Brisbane. “We are grateful for all of our staff’s efforts and will work with our joint-venture partners and the regulator in due course to transition to a brand new casino operator.”
The group would continue to focus on remediating the business and restoring their reputation as a licensee suitable at The Star Gold Coast, and The Star Sydney.
New World Disordered.
Chow Tai Fook has increased its stake in Star amid turmoil at New World Development. The HKEX-listed company’s shares have fallen almost 20 percent since November, when the builder announced that it would be appointing a new CEO. This is the second time the builder has done this in less than two months.
Adrian Cheng, a third-generation scion, resigned as chief executive of New World in September after the company posted its first annual loss in 20 years. Eric Ma, Cheng’s successor, resigned from the role in late November. He was replaced by New World China Land CEO Echo Huang. Bloomberg reportedin December that the Cheng’s infrastructure division was looking to sell toll road in mainland China valued at about $2 billion. This news came just one month after New World announced plans to sell Chow Tai Fook its entire interest in a former Kai Tak Airport sports complex for HK$416.7m ($53.5m).
