This is from the announcement by Far East Consortium on the Hong...

This is from the announcement by Far East Consortium on the Hong Kong exchange:

Note: Star = SGR, JV Partners = Far East Consortium & others.

• The Star will assume all responsibility for any construction cost overruns in respect of
completing the Tower 2 (Andaz) over and above the relevant amount estimated by The
Star, including construction of the pedestrian footbridge, and will assume any and all
variations or claims brought by the contractor in respect of the entire Tower 2 (Andaz
and Apartments); and

• the JV Partners will assume all responsibility for any remaining construction cost in
respect of completing the Tower 2 (Apartments) (excluding variations).

https://doc.irasia.com/listco/hk/fareastcon/announcement/a250307.pdf


The QUeens Wharf Brisbane (QWB) has 1.6 billion debt of which 50% aka 800 million was SGR's but CTFE & FEC will takeover all debt with the asset swap.

So, the numbers...

This is how im reading it:

QWB value = 3.6 billion of which, 50% was SGR's = 1.8 billion

- 800 million debt = value of 1 billion for QWB owned by SGR


Then...

"The total cost of the project was estimated at A$3.6bn ($2.3bn), with Star committing significant capital towards its development. However, according to company statements last September,Star Entertainment's new CEO, Steve McCann, was looking to write down the value of Queen's Wharf by A$1.4bn"

So 1 billion - 1.4 billion means SGR's QWB value = negative 400 million.

+ value of other assets (carparks an treasury building) - assumed $250 million = negative 150 million

+ 53 million cash from CTF = negative 97 million

+ value of two towers @ approx 800 million x 66.6 % ownership = 532.8 million

= total value recieved by SGR of 435.8 million (plus other contractual agreements not touched on).

435.8 million / 2.87 billion shares = ~ .151 per share

Meaning if the market responds appropriately share price should bounce to .26 or there abouts... aka 26 cents.

Rightfully, some might be asking "why would the JV partners do this deal that appears positive for SGR?" - remember, the hong kong JV partners have whales in management who also happen to own significant quantities of SGR securities so, a deal that's good for SGR, a deal that saves SGR, is also good for those whales.

Of course, SGR was priced for close to a worse case scenario being bankruptcy, and as others have said they are not completely free of their troubles just yet.

We will see what mr market thinks in due time.

Short squeeze would be a nice reward for investor risk. I'm assuming fair value of 20-40 cents depending on how market sentiment changes towards SGR. Anything 40 cents and above I'd have to assume the possibility of either a short squeeze influencing price or perhaps large investors knowing more than we do and diving in.

Other consideration not accounted for above is the debt facility for Destination Gold Coast Consortium (DGCC - the JV that SGR now owns 100%) of which SGR is/was guarantour. In SGR's 2024 financial report there was no report of this being drawn down (yet) and in the latest announcement there's no signal of whether it's been drawn down and if so, to what extent, and there's also no indication of who will be taking (100%)responsibility for this facility.

From 2024 an report:

GUARANTEES
The Company has provided a guarantee to the debt providers of its associates and joint ventures:
 Destination Brisbane Consortium: the guarantee covers 50% of the Gaming and Entertainment syndicated facility
agreement (SFA G&E) (see below) (of which $1.5 billion is outstanding at 30 June 2024) (see below); and
 Destination Gold Coast Consortium: the guarantee covers up to 46.3% of the $309.5 million in facilities.

I'm going to go out on a whim here and say it's likely, in my mind, that this facility has not been used/will not be used according with the statement "the JV Partners will assume all responsibility for any remaining construction cost in respect of completing the Tower 2 (Apartments) (excluding variations)."

Rough figures, DYOR and only my opinion of course. Changing sentiment from 'None' to 'Buy'.