Dubai Park Spells Out Six Flags Funding Route

Mar 29, 2016

Dubai: Shareholders in Dubai Parks & Resorts will take a call on Dh1.68 billion rights issue on April 18, which, if approved, will part-finance the development of a high-profile Six Flags themed destination. The Board of Directors has put up the proposal under which the company – part of Meraas Holding – will issue an additional 1.678 million shares at Dh1 each.

On April 18, shareholders will also get to authorise the Board to determine the timing of the proposed issue. If approved, the Board have a year’s window from the date of the general assembly to decide on the launch of the rights issue. (This is subject to a go-ahead from the Securities and Commodities Authority.) It was in December 2014 that Dubai Parks had a hugely successful Dh2.5 billion flotation on DFM (Dubai Financial Market).

The total funding needs for the Six Flags project is estimated at Dh2.6 billion, with an additional Dh65 million being raised to cover new business development and issue expenses. The total capital of Dh2.67 billion will be funded through a debt component of Dh993 million and the remaining by way of the proposed rights issue.

According to industry sources, the approval from the shareholders is a foregone conclusion, as it would see Dubai Parks embark on its second large canvas project after the one (actually three theme parks in one) it is building in Jebel Ali. This is scheduled for an October opening and projected to generate Dh2-billion-plus in the first full year of operations.

It will also be interesting how the debt portion (Dh993 million) will be funded. Banks, local and regional, would have sufficient appetite, as evidenced by the recent Dh1.73 billion one Qatar’s QNB and its subsidiary CBI (Commercial Bank International) had with the Meydan Group.

Once the rights issue is announced and concluded, the company’s issued share capital will become Dh7.9 billion.

The Six Flags venture – first announced in April 2014 - will thus build on that track-record. Plus, there will be synergies from it being developed within Dubai Parks & Resorts and with all the basic infrastructure in place. (The rights to the branding is held by a Texas based Six Flags and one of the world’s premier owners and developers of themed destinations.) For Six Flags, the developer has a Q4-2019 opening in mind. It will be the fourth theme park at the destination and expected to include close to 27 rides and attractions for all ages.

According to Raed Kajoor Al Nuaimi, CEO, Dubai Parks, “Six Flags is one of the world’s largest amusement park corporations with 18 properties around the world. This means we will be able to strengthen the appeal of our destination, attracting thrill-seekers of all ages.

“As the fourth most visited city in the world, Dubai Parks and Resorts and the additional Six Flags component, is set to benefit from the UAE’s increasingly popularity as a tourist destination as well as its growing population.”

Dubai Parks shares ended down 6.92 per cent at Dh1.21 on Dubai Financial Market (DFM) on Monday.

Credits to Gulf News



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