Star Entertainment has announced the termination of its deal to sell a 50% stake in the Queen's Wharf project in Brisbane to Hong Kong's Far East Consortium International and Chow Tai Fook Enterprises.

The joint venture partners had previously expressed their intention to acquire Star's stake for $53 million, but ongoing negotiations have failed to resolve key commercial issues.

The termination of the deal will take effect five business days from June 30, 2025, unless the parties decide to withdraw it earlier.

Star is grappling with severe financial difficulties, facing a significant downturn in revenues due to a loss of high-roller gamblers and rising living costs, compounded by regulatory pressures.

As a result of the deal's failure, Star retains a substantial debt of $1.4 billion, complicating its financial recovery efforts.

Despite the termination notice, Star's shares rose by 1.7% to 14.75 cents, bolstered by a recently approved $300 million rescue deal backed by US casino operator Bally's.

If the termination is finalized, Star will need to repay $10 million to its partners within 30 days or transfer its stake in the Gold Coast hotel project.

The rescue deal, which was approved by Star's shareholders, involves Bally's acquiring a majority stake in the company, with additional financial support from pokies billionaire Bruce Mathieson.

The proposed buyout was initially viewed as a lifeline for Star, providing essential funds and operational fees to stabilize its financial situation.

Should the deal collapse, Star may face bankruptcy, as it would be responsible for funding half of the Queen's Wharf project's completion costs.

Star has expressed a willingness to continue negotiations with its joint venture partners regarding the transaction, despite the termination notice.

The company's full-year earnings report is expected in August, which may reveal ongoing cash losses attributed to restrictions on cash gambling and fewer high-roller gamblers.