Development of Six Flags Dubai put on hold indefinitely
Decision follows a strategic review of DXB Entertainments' operations and funding concerns
DXB Entertainments, the Dubai theme parks operator, shelved plans for a Six Flags theme park, which was part of its expansion plans, due to lack of financing.
The decision comes amid a strategic review of DXB Entertainments’s future development plans and capital allotment, which the board commenced last August, the company said in a statement. This included Six Flags Dubai, which was scheduled to open this year.
“In the intervening period, actions, including formal notification by [Texan amusement park operator] Six Flags, resulted in funders' concerns being raised specifically in relation to the revised projections for the Six Flags Dubai Project,” DXB Entertainments said. “As a result, the syndicated finance facility intended for utilisation as part of the development of the Six Flags branded theme park is no longer available, and the Six Flags Dubai project cannot proceed at this time.”
The scope of the review, which the company disclosed last November, will be adjusted as a result, and DXB Entertainments will provide an update “in due course”, the company added.
DXB Entertainments, in which Dubai real estate developer Meraas Holding holds a 52.3 per cent stake, has been working to pay down losses incurred in the past few years. The company operates Dubai Parks and Resorts, which holds the franchises for Legoland and Motiongate and runs the Bollywood theme park.
Last year, it restructured Dh4.2 billion of bank debt and received new funding from Meraas. In the third quarter of 2018, DXB Entertainments narrowed its losses by 4.5 per cent to Dh271.4 million from the year-earlier period, having previously narrowed second-quarter losses by 11 per cent year-on-year to Dh255m. The company is yet to report its fourth-quarter earnings.
Meanwhile, the number of visitors to DXB Entertainments’ parks is rising. Total visits in the third quarter of last year increased 5 per cent to 501,394 – despite it typically being the slowest time of the year, affected by the summer heat, the company’s chief executive and managing director Mohammed Abdulla
Average occupancy at the Lapita hotel at Dubai Parks and Resorts rose to 66 per cent in the third quarter of 2018, up from 42 per cent in the corresponding period of 2017.
There is an upswing in the number of new theme parks and attractions in the Arabian Gulf. Launched in late 2016, DXB Entertainments struggled to meet its initial target for visitor numbers and delayed the date of opening all of its attractions.
Neighbouring Saudi Arabia is also investing in expanding the domestic entertainment industry, with plans for a Six Flags theme park in the kingdom in the coming years.
Updated: February 7, 2019 05:32 PM