The Star Entertainment Group (ASX:SGR) said that a binding heads of agreement with its joint venture partners, Chow Tai Fook Enterprises and Far East Consortium International, relating to the firm's ownership interests in the Destination Brisbane consortium, the Destination Gold Coast consortium, and other assets was terminated, according to a Friday Australian bourse filing.
It said it is continuing to engage with Chow Tai Fook Enterprises and Far East Consortium International.
The joint venture parties were unable to reach an agreement on several outstanding commercial issues, which prevented the finalization of long-form documents. A proposal by the firm to extend the termination date to August 6 was not accepted by the joint venture partners.
The Star will have to repay AU$10 million it received from the joint venture partners by Aug. 6. It will retain its 50% equity interest in the Destination Brisbane consortium, its one-third equity interest in the Destination Gold Coast consortium, the Treasury Brisbane hotel and car park, and its 50% stake in the Charlotte Street Car Park.
It will also reimburse the joint venture partners for the share of equity contributions that they have made by the joint venture partners to the Destination Brisbane consortium since March 31, estimated at around AU$31 million. This is payable by Sept. 5.
If the firm is unable to pay these amounts, it must transfer its one-third interest in Tower 1 Hotel at Queensland's Gold Coast to the joint venture partners.
The joint venture partners are expected to reimburse Star Entertainment for the share of equity contributions made by the firm to the Destination Gold Coast consortium since March 7, estimated at around AU$1 million.
The firm's shares fell 5% in recent trading on Friday.
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