billion casino complex at risk
ASF, the sole owner of a consortium planning a US$3 billion casino resort on Australia’s Gold Coast, has just $6.25 million in cash reserves after losing $93 million of $102 million raised from investors, putting it at risk of insolvency or even collapse.
According to the Gold Coast Bulletin, in filings to the Australian Stock Exchange, the auditing firm Grant Thornton reported that ASF’s financial status “may cast significant doubt about the consolidated entity’s ability to continue as a going concern.”
Grant Thornton partner Matthew Leivesley said ASF’s ability to “continue as a going concern” would depend on it “achieving sufficient profitability” and raising more funds “in the future to support the working capital needs.”
ASF countered that it risks collapse only in the “unlikely scenario that the group is not able to obtain additional capital as and when required.” In a report signed by ASF Chairwoman Min Yang, the group said it had a “long and proven track record in raising capital” including a $5 million convertible loan at 10 percent annually from Star Diamond Developments Ltd. last September, reported the Australian.
The Queensland government is behind ASF’s proposal for a “world-class casino” with five high-rise towers on the Southport Spit. Gold Coast Deputy Mayor Donna Gates said the state government “will do its due diligence about ASF’s ability to deliver as part of the whole process.”
Critics of the massive project include the Save Our Spit Alliance. Steve Gration, president of the community group, said ASF is “a shell company that seems to trawl for projects in Australia and either on-sell them or invite more financial companies, in particular Chinese state government companies, to join them once they’ve got the green light projects. We think it’s a very dubious way for governments in Australia to do business.”
A spokesman for the Queensland Department of State Development told the Australian the government would “assess the commercial viability of the consortium proposal and consider the financial capacity of individual members as well as the wider consortium.”
Meanwhile former Newman government MP Alex Douglas, an outspoken critic of the casino project, said ASF’s negligible cash reserves are no surprise and also not a critical problem for the consortium. “There’s never been any money there, but when it comes down to it, those companies backing ASF as investors will put the money up,” he said.
He added, “This is all about a land grab. I’ve actually got no objection now to building something but build it on leasehold land, don’t let them try and claim freehold land.”
Gates responded that “the specifics of that particular project” are “not clear to the council at this point in time. I’m hopeful that the state and council can work together to master plan that area because it seems to be a priority for the community. I think everyone is united in wanting to ensure that the Spit remains available for community access into the future.”
She added, “Anything that creates the level of employment that’s being suggested will obviously be welcome on the Gold Coast.”
