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Cash-strapped casino operator The Star Entertainment Group (ASX: SGR) is selling its Sydney events centre for $60 million in the latest asset disposal by the group to ease its debt burden.
The Star Sydney Event Centre, which is part of the company’s casino complex at Pyrmont, is being acquired by Foundation Theatres which counts Sydney’s Capitol Theatre, Sydney Lyric and Foundry Theatre among its venues.
The deal remains subject to “long-form transaction documents” as well as government and regulatory approvals.
Foundation Theatres will pay a $60 million exclusivity fee on or before 31 January 2025, with the fee to be held in escrow until the deal is settled.
“The Star has worked closely with the team at Foundation Theatres since they acquired the sublease for the Sydney Lyric in 2011,” says The Star’s CEO Steeve McCann.
“We are pleased to partner with them as part of the continued evolution of our broad entertainment offerings at The Star Sydney.
“We continue to work on a number of other potential non-core asset transactions."
The sale is expected to be completed by 28 February 2025 with The Star noting that the proceeds will be held in a disposal proceeds account established under the terms of the group's recent $200 million debt facility.
The company says the proceeds will be described as “restricted cash’ in its accounts.
Foundation Theatre was established in 2008 by theatre infrastructure and lighting systems specialist Stephen Found. The company secured ownership of the Capitol Theatre in 2009 and later Sydney Lyric in 2011 and more recently Foundry Theatre.
Found is said to have a “passionate interest in the live performance industry” with the company’s mission centred on new opportunities to develop its theatre offerings with “new live performance venues that support a wide variety of performance types from emerging works and artists”.
The Star Sydney Event Centre is a break from this mission as the venue also hosts exclusive events, meetings, award ceremonies and conferences.
The sale of the venue follows The Star’s divestment of its Brisbane Treasury building for $67.5 million to Griffith University last year to release capital and pay down debt.
The company has been under added pressure after failing to secure the second tranche of the $200 million debt facility, due at the end of December.
Available cash at the end of December stood at $78 million, down from the $79 million unaudited figure announced earlier this month.
The precarious debt position led the company early last week to warn that there remains “material uncertainty as to the group's ability to continue as a going concern’.
Shares in The Star surged more than 13 per cent in early trading. The shares were trading at 12.75c, up 1.25c at 10.42am (AEDT).
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