Australia casino operator Star revives 50% asset sale to HK investors

By Byron Kaye and Rishav Chatterjee

(Reuters) -Troubled Australian casino company Star Entertainment said on Tuesday it had revived a sidelined deal with its Hong Kong-based partners to sell a half stake of its A$3.6 billion ($2.35 billion) Brisbane resort, sending its shares soaring.

Star is selling its interest for A$53 million, of which A$45 million was paid in March.

The company had cautioned that it risks collapse owing to a perfect storm of heightened regulation, lack of tourists and elevated living costs.

The cash helps Star service substantial debt that it racked up converting its Brisbane property to much fanfare.

Talks broke down on August 1 after investors Far East Consortium and Chow Tai Fook Enterprises — both seeking to exit the joint venture — refused Star’s request to extend negotiations.

On Tuesday, Star said the investors had now agreed to a sale on terms broadly similar to the original proposal. It did not say why the Asian companies agreed to resurrect the talks.

Far East Consortium and Chow Tai Fook were not immediately available for comment. Far East’s Hong Kong-listed shares were paused.

Shares of Star were up 32% by midsession, against a flat overall market, bouncing from a near-record low after the company announced the reprieve.

After the talks fell apart, Star began returning the A$45 million which the investors had already paid. The money Star paid back would now be returned, the casino operator said.

Star will also take two-thirds of two Gold Coast hotels under construction from the Hong Kong shareholders, and will retain its rights to any future development at the Gold Coast operations, it said.

The company is expected to report annual financial results on August 28.

($1 = 1.5349 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Alan Barona and Saad Sayeed)