Star Entertainment Sells Sydney Venue to Offset Financial Challenges

Troubled gambling operator Star Entertainment Group has announced the sale of its Sydney Event Center and other assets in The Star Sydney complex. The sale is part of an AU$60 million (US$37.5 million) deal with Foundation Theaters.

The transaction seemingly aims to buy some time for Star, which struggles to stave off insolvency. The operator confirmed through an ASX filing that it has entered the exclusivity agreement and binding term sheet, awaiting the conclusion of long-form transaction documents and several necessary conditions like government approval.

Calculated Move Amid Distress

The sale of non-core assets is seen as one of the last resorts to boost liquidity, with The Star admitting that options to raise much-needed funds are limited. The deal is expected to stabilize the casino operator's finances as it explores other potential assets it can divest as it restructures operations.

"The Star has worked closely with the team at Foundation Theatres since they acquired the sublease for the Sydney Lyric in 2011," noted Star Entertainment Group CEO Steve McCann in a statement. "We are pleased to partner with them as part of the continued evolution of our broad entertainment offerings at The Star Sydney."

A Potential Revamp

The Star Sydney Event Center sale signals a new era for the venue with the likelihood of undergoing significant alterations under Foundation Theatres. According to reports, the new owners have settled on a 1,550-seat Broadway-style theater for the Event Center and secured planning approval for the revamp.

These changes align with Foundation Theatre's strategic expansion in Sydney. The company has managed the Sydney Lyric Theatre since 2011, and the Event Center will solidify its presence, bringing contemporary music events to the precinct and boosting visitation in the area.

Still in The Red

According to Star's debt facility agreements, Foundation Theatre will deposit AU$60 million into an escrow account, which will go towards restructuring efforts. This comes months after the operator sold the Treasury Casino in Brisbane to Griffith University.

Even with these asset disposals, Star remains in a dire situation. In December 2024, the company reportedly had only AU$79 million in unrestricted cash reserves. These issues are further complicated by regulatory scrutiny due to AML compliance failures. As a result, the company's operations are under government supervision in New South Wales and Queensland.