With $100 million in fines to pay for past misconduct and a crunch on margins that will be exacerbated by a higher casino duty in NSW, The Star Entertainment Group (ASX: SGR) is closer to freeing up more cash after striking a deal to sell the Sheraton Grand Mirage Resort Gold Coast for $192 million.
The sale price is $8 million short of what the hotel and casino operator was seeking, and comes around three months after the property was put on the market.
The hotel was a symbol of elegance as a frontrunner of the Gold Coast's tourism boom in the late 1980's, and has changed hands multiple times since then with previous owners including Christopher Skase’s Qintex group, MFS, Raptis Group (ASX: RPG), and India-based Pearls Australasia.
The Star acquired the Sheraton Grand Mirage in 2017 in a joint venture with its Hong Kong-based partners in the $3.6 billion Queen’s Wharf development in Brisbane - Chow Tai Fook Enterprises and Far East Consortium - for $140 million.
That joint venture, Australian Wattle Development, has reached an agreement to sell the Sheraton Mirage to entities owned by the Karedis and Laundy families, subject to the buyers obtaining approval to the transfer of the liquor licence from the Queensland Office of Liquor and Gaming Regulation.
The Laundy family has a portfolio of pubs through its business Laundy Hotels, mostly comprising venues in Sydney and parts of regional NSW.
Meanwhile the Karedis family, whose fortunes were built from Theo's Liquor stores which were sold to Coles Myer in 2002, owns property group Arkadia which owns almost a dozen shopping centres along the Australian east coast and three hotels: the Sofitel Noosa Pacific Resort, Manly Pacific, and Crowne Plaza Terrigal Pacific.
The Star estimates the sale price represents a calendar year 23 earnings multiple of 21x and approximately $650,000 per key.
The sale, announced late yesterday afternoon, came within a week of Charter Hall (ASX: CHC) scrapping plans to buy another Star-owned property, Brisbane's iconic Treasury Casino building.
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