Legoland Dubai Owner Resets Visitor Targets, Restructures Debt
(Bloomberg) -- DXB Entertainments is reorganizing debt and resetting targets on the number of visitors to its Legoland and Sony Pictures theme parks in Dubai after numbers fell short in 2017.
"The projection of 6.7 million visitors for 2017 is not the base we are going forward with anymore," Chief Executive Officer Mohamed Almulla told Bloomberg in a phone interview on Monday. “Such numbers are achievable, but not in the short term," he said, without giving a timeframe.
DXBE, as the firm is known, agreed on a 1.2 billion-dirham ($327 million) convertible bond with its biggest shareholder and a delay to payments on bank debt after posting a wider-than-expected loss for the full year. Originally known as Dubai Parks & Resorts, DXBE’s attractions, including parks based on Bollywood and Hollywood films such as The Hunger Games, had 2.3 million visitors last year.
Dubai Parks & Resorts “was not fully operational for most of 2017,” Almulla said. “I think 2018 will be a true reflection of the performance of the organization."
DXBE’s stock declined 1.7 percent to 0.515 dirham as of 1 p.m. in Dubai, heading for the lowest level on a closing basis on record, and extending losses over the past 12 months to 50 percent.
The company agreed to wrap an existing 700 million-dirham loan from Meraas Leisure & Entertainment LLC, which owns 52 percent of the company, into the convertible bond, it said Monday in a statement to the Dubai stock exchange. The parks operator also agreed a three-year moratorium on principal payments and covenant testing on a 4.2 billion-dirham bank facility.
DXBE, which counts Qatar Investment Authority as its second-biggest shareholder, started talks with lenders about restructuring the bank loan last month, people familiar told Bloomberg. It reported a full-year loss of 1.12 billion dirhams for 2017 in February, missing analyst estimates for a 896 million-dirham loss. DXBE has not paid any dividend since the initial public offering in 2014.
The main priority for the company is to reach a break-even point as measured by earnings before interest, tax, depreciation and amortization, CEO Almulla said. “The promising trends seen at the end of 2017 make us optimistic about our strategy to continue to drive footfall to Dubai Parks and Resorts."
Almulla said the company was pushing ahead with the LegoLand Hotel and Six Flags theme park and expects them to be operational at the end of 2019.
"We are going on with our plans for Six Flags and LegoLand Hotel,” he said. “These are fully funded projects and their addition in end of 2019 will play a major role in attracting tourists to our parks."
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