The Melbourne Star observation wheel is facing a multimillion-dollar debt bill after it was forced to close, becoming the latest high-profile casualty of the COVID-19 pandemic.
MB Star Properties Pty Ltd announced earlier this month the company was going into liquidation because travel restrictions and lockdowns had exacerbated financial struggles and made it “impossible to sustain the business”.
A creditors’ report filed with the Australian Securities and Investments Commission on Monday shows the tourist site that has become a feature of Melbourne’s city skyline has racked up more than $3.9 million in debt.
The largest creditor is a Liechtenstein-based foundation, owed almost $2.5 million, that owns and manages observation wheels and amusement parks around the world. The company’s tag line is: “I did not invent the wheel, but I did make it better!”
A further $41,435 is owed to real estate company Savills, which managed the wheel’s Docklands property assets.
The wheel’s location has long been controversial, with many critical of views that were crowded by the suburb’s rising number of residential skyscrapers.
However, general manager Nicole Hill previously defended the waterfront precinct location by pointing to the wheel’s 300,000 annual visitors.
The ASIC report, lodged by liquidators Grant Thornton, shows the company also owes $88,595 to the State Revenue Office and a further $105,514 to Honan Insurance Group. The debt bill is likely to grow as the liquidators have not yet determined the amount due to the Australian Taxation Office, commercial cleaners CleanNet and IT provider Tekspace.
Some debts can be paid from the company’s assets. ASIC’s report shows the group has $665,522 in assets, including cash and shares. Ms Hill previously stated the wheel’s 35 staff would be paid full entitlements.
The $100 million observation wheel opened in 2008 under the name Southern Star but was forced to shut just 40 days later because of cracks caused by design problems. It was out of operation for almost five years as it was taken down and almost fully rebuilt.
The wheel continued to light up for 231 days last year despite being closed due to lockdowns. Now the lights have been switched off and the liquidators will decide whether to dismantle one of the world’s largest observation wheels.Internet Explorer Channel Network