Star Entertainment sent to court over Sheraton Mirage Resort deal
After the deal failed to settle last month, the $140 million bid made by Star Entertainment to buy the Sheraton Mirage Resort has landed in court.
The group currently has around 8,000 employees and signed a contract to buy the property on October 12. The plan was to redevelop the site as a Gold Coast beachside satellite resort for their Queen’s Wharf project in Brisbane.
It has since been revealed that Australia Wattle Development, which is a partnership of Star and Far East Consortium, signed off on loans of $132 million on December 16 to complete the sale.
A few days later though, Australia Wattle launched a civil action against the sellers — Miiresort Group 1 and Miiresort Group 2, in the Brisbane Supreme Court.
A year earlier, a sale to rival casino developers Aquis Entertainment was abandoned after the parties couldn’t agree to terms.
CEO Matt Bekier said it would complement their Brisbane plans for a “European beach club” as he announced Star’s plans on the site last year.
Speaking with the Gold Coast Bulletin, he said “There are not that many large-scale assets that are available in Australia that are bang on the beach.”
Debra Mullins, a Supreme Court Justice extended an injunction against Miiresorts from dealing with, selling or borrowing against the Sheraton or its assets until a civil hearing on the 6th of February.
Directors Paul Brinsmead and Peter Madrers of MiiGroup, formerly known as Pearls Australasia have provided affidavits, which have been sealed from public viewing.
SEBI, which is India’s corporate regulator is a party to the case, they are seeking to recover up to $130 million they allege was funnelled into Australian investments, including the Sheraton, from up to 58 million working class Indian victims.
After hearing that the resort was purchased outright, without a mortgage, it ordered funds from any sale of the Sheraton to be placed in a trust until the matter is finalised.
According to Company documents, to purchase the property, the Star partnership had planned to borrow $132 million for the sale from a related company — Destination Gold Coast, who had in turn loaned $72.5 million from National Australia Bank.
Under the loan agreement, NAB was to hold the mortgage of the Perpetual Lease and the Spa and Health Club Lease.