The Star Entertainment Group has narrowly avoided a deal collapse with its Hong Kong-based partners over the sale of its stake in the Queen’s Wharf Brisbane development, securing a last-minute extension that buys the troubled casino operator until July 31 to finalize critical sale documents.

The Australian firm is attempting to exit its 50 percent ownership in the Destination Brisbane Consortium (DBC), the entity behind the Queen’s Wharf casino and resort complex in Brisbane. The remaining half of the consortium is already owned jointly by Hong Kong-listed Far East Consortium and private conglomerate Chow Tai Fook Enterprises, who had previously agreed to acquire Star’s portion.

However, cracks began to show in the partnership when the Hong Kong investors issued a termination notice on July 1, threatening to withdraw from the agreement unless long-form contracts were finalized within five business days.

In a joint development disclosed on Monday and published by Capital Brief, all parties agreed to a new “set of principles” that will see “certain departures from the heads of agreement,” allowing the negotiations to continue through to the end of July. Although the specifics of these departures were not publicly detailed, Star has confirmed that the talks will now proceed with the aim of signing formal documents by the extended deadline.

Financial Stakes High if Agreement Falls Apart

The consequences of a failed agreement are steep. Star will be required to return AU$10 million (US$6.54 million) it received as part of the initial agreement and repay approximately AU$26.5 million (US$17.2 million) in shareholder loans contributed by Chow Tai Fook and Far East since March 31. These financial obligations total AU$36.5 million and must be met by the end of September should the deal ultimately collapse.

Additionally, if the AU$10 million isn’t repaid within 30 days of the original July 7 deadline, Star may be compelled to transfer its 33.3 percent ownership in “Tower 1” of the Queen’s Wharf precinct to the joint venture partners, according to filings by Far East Consortium.

In a Monday statement, Far East said the past week’s discussions were centered on “matters principally relating to the orderly transition of the management of the Queen’s Wharf project, to ensure certainty for the JV partners and other relevant stakeholders in facilitating the exit of The Star from the equity and management of the project.”

Mounting Pressures and Stakeholder Intervention

The delay comes amid intensifying financial strain for Star, which is navigating a broader crisis marked by a plunging share price and substantial debt of AU$1.6 billion. Shares in the casino operator dipped as much as 3.85 percent on Monday morning to AU$0.125 as investors reacted to news of the precarious negotiations.

The embattled group secured a AU$300 million bailout in late June from a rescue package backed by U.S.-based gaming giant Bally’s Corporation and the Mathieson family, Star’s largest shareholder. This investment is expected to give Bally’s a controlling interest in the Australian casino operator.

However, Bally’s role introduces new complexities to the Queen’s Wharf negotiations. The U.S. company holds an effective veto over the deal if significant changes are made to the original terms. Bally’s chairman, Soo Kim, has previously voiced concerns, emphasizing that the group’s Queensland assets “should be run together for optimal performance.”

This adds pressure on all parties to keep the transaction as close as possible to its initial structure or risk having it blocked altogether.

Deal Still Possible, But Clock Is Ticking

Although the deadline extension offers a temporary reprieve, the path to a finalized deal remains uncertain. All involved parties have acknowledged that payment obligations will no longer apply if formal agreements are executed by July 31—or any further date mutually agreed upon in writing.

Still, the risk of collapse looms large, and with so much at stake—including operational control, shareholder confidence, and ongoing financial viability—Star’s future at Queen’s Wharf may be determined within the coming weeks.

Until then, the company must navigate not just boardroom negotiations, but also looming liabilities and ongoing regulatory and financial pressures. With no room for error, Star is in a race against time to avoid further financial fallout.