KUALA LUMPUR – Khazanah Nasional Bhd’s leisure business has been bleeding red over the last five years despite receiving slightly more than half a billion in taxpayer loans to build a theme park, company filings showed.
Themed Attractions Resorts and Hotels Sdn Bhd (TARH), wholly owned by the sovereign wealth fund, netted losses of RM37.23 million, RM52.41 million, RM32.51 million, RM398.64 million, RM539.36 million for the financial years 2015-2019, respectively.
Synonymous with the group are family friendly crowd-pleasers KidZania, Sanrio Hello Kitty Town and Legoland, among others.
TARH subsidiary Iskandar Investment Bhd built Legoland Malaysia through a below market-rate RM550 million loan from Ministry of Finance Inc, with a certain quantum paid off through government grants each year.
According to its 2019 annual report, TARH received a total of RM48.16 million in government grants to pare the MoF Inc loan between 2018 and 2019. The group still needs to clear RM365.88 million.
TARH made headlines last Thursday after KidZania Singapore had been reported to be in liquidation with S$53.4 million (RM162.95 million) owed to more than 1,000 parties, including businesses and government agencies in the city-state.
The group admitted in its latest annual report that coronavirus pandemic will affect operations and cash flow, saying that it had already began negotiating as early as February “with lenders on debt servicing and restructuring to help release much needed cash flow into our system and to provide some financial headroom for the group”.
Khazanah has also agreed to enter into a subscription agreement for a 100 million redeemable convertible cumulative secured loan stocks of RM1 each to be issued by the group for a total subscription price of RM100 million.
Proceeds from the loan will be used for working capital, TARH said, adding that it is negotiating with its vendors and contractors.
The group has also hinted to retrenchments where catering to domestic tourism post-coronavirus lockdown would be done in a “limited capacity” and “at a very highly cost-controlled level” for the first few months, “building up capacity as demand requires”.
TARH believes that it will be able to meet all obligations when they fall due “within the period of 12 months after the end of this financial year”. – The Vibes, October 19, 2020
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