(Bloomberg) — Star Entertainment Group Ltd. is in talks to sell its stake in a new Brisbane complex to its Hong Kong-based partners, though their opening offers were rejected as too low.
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The embattled Australian casino operator is racing to raise capital after last month warning its future as a viable business is in doubt as it runs short of cash.
The Australian Financial Review earlier reported that Star was in talks with partners Chow Tai Fook Enterprises Ltd. and Far East Consortium Ltd. to sell its 50% interest in the Brisbane complex, which has an A$1.6 billion ($1 billion) debt pile and still requires hundreds of millions of dollars to be completed.
In a statement Monday, Star said it had received several offers from its partners, but none have provided “sufficient value.”
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The companies will continue to talk to see whether a satisfactory deal can be reached, Star said, and again reiterated its parlous financial state. The company needs to raise A$150 million of subordinated debt to tap an agreed lifeline of a further A$100 million of borrowings.
“While discussions continue with respect to a range of different solutions, there is no certainty that any of these discussions or negotiations will result in one or more definitive arrangements that might materially increase the group’s liquidity position,” Star said.
“In the absence of one or more of those arrangements, there remains material uncertainty as to the group’s ability to continue as a going concern.”
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