DXB Entertainments reaches deal with banks and extends temporary suspension of theme parks
The company’s chief executive expects Covid-19 to have a 'material impact' on the company’s 2020 results
DXB Entertainments, operator of Dubai Parks and Resorts, reached an agreement with banks to defer a "significant proportion" of the interest on a Dh4.2 billion syndicated loan which will improve the company's liquidity as the company extends the suspension of its theme park operations due to the coronavirus outbreak.
"Our liquidity position is robust and I am pleased to announce has been further improved by reaching agreement with our financing partners to defer a significant proportion of our interest over the next 15 months, significantly improving our near-term liquidity," said Mohamed Almulla, managing director and chief executive of DXB Entertainments, in a statement on Thursday to Dubai Financial Market, where the company's shares trade.
Theme park operations at Legoland, Motiongate and Bollywood Parks will remain suspended, the company said. Operations at Lapita hotel and retail destination Riverland Dubai have also been suspended.
The company previously said its theme parks would remain shut until the end of March as authorities ordered public places such as parks and malls to close temporarily to curb the spread of the virus.
"The health and safety of our employees, guests and their families is our top priority, and accordingly and in support of both local and global efforts to reduce the spread of Covid-19, we have taken the decision to extend the temporary suspension of operations at our destination,” said Mr Almulla, managing director and chief executive of DXB Entertainments.
Mr Almulla said the coronavirus outbreak will have a material impact on the company's 2020 results.
“However, given the high level of uncertainty, it is too early to quantify this impact," he said. "Our contingency plans have been activated and as of today, we have either implemented or are in the process of implementing further cost savings, in addition to the material savings already delivered in 2019.”
DXB Entertainments implemented a cost efficiency and optimisation plan in 2019, delivering year-on-year savings of Dh172 million or 24 per cent, with further savings expected in 2020.
It is currently in the process of implementing a number of additional temporary measures to mitigate the impact of the suspension of operations, including renegotiation of supplier agreements, an immediate reduction in marketing spend and a suspension of outsource arrangements.
The company has also decided to delay the opening of the Legoland hotel from June to fourth quarter of 2020 due to the “current uncertainty and potential reduction in demand for the remainder of the year.”
Updated: April 2, 2020 05:26 PM