AusLeisure

Cash-strapped casino operator Star Entertainment has announced that is to sell its Sydney theatre and event venues to Foundation Theatres for a sum of $60 million.

Foundation Theatres, which already runs the Lyric Theatre inside The Star Sydney and is the owner of Sydney’s Capitol Theatre, will acquire the Lyric, The Star Sydney Event Centre and other additional spaces within The Star Sydney complex.

The move comes as the embattled casino operator raised concerns about liquidity and cash earlier this month, having only $79 million in available cash at the end of the December quarter.

The $60 million exclusivity fee to be paid by Foundation Theatres by 31st January will be held in Star's disposal proceeds account, established under the terms of the group's debt facility, and will constitute restricted cash.

Completion of the deal, which remains subject finalisation of long-form documents and customary conditions, is currently targeted for 28th February.

Announcing the sale, Star Chief Executive, Steve McCann advised "the Star has worked closely with the team at Foundation Theatres since they acquired the sublease for the Sydney Lyric in 2011.

"We are pleased to partner with them as part of the continued evolution of our broad entertainment offerings at The Star Sydney.”

In a statement, Foundation Theatres advised that the Event Centre and additional spaces will be converted into new venues to host theatre, live entertainment and contemporary music.

The Star has already appointed FTI Consulting as its safe harbour adviser, to protect it from its creditors. Its shares surged after the announcement of the divestment.

Image: Sydney's Lyric Theatre.

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