KUALA LUMPUR – Sovereign wealth fund Khazanah Nasional Bhd has cited the Covid-19 pandemic and the subsequent economic downturn as factors behind its decision to wind up its theme park, Kidzania Singapore.
In a statement today, Khazanah sought to clarify matters relating to The Vibes’ report on the theme park’s sale at a significant loss.
The statement detailed that the theme park was operated by Khazanah subsidiary Destination Resorts and Hotels Sdn Bhd (DRH) – formerly known as Themed Attractions Resorts and Hotels Sdn Bhd (TARH) – through Rakan Riang Pte Ltd.
“Despite best efforts by Rakan Riang to achieve a stable financial position for Kidzania, the Covid-19 pandemic and economic effects that followed dampened ticket sales and affected commercial partners, which impacted its overall financial performance.
“This led to a voluntary winding up and the appointment of a liquidator on June 11, 2020 to recover and liquidate all Rakan Riang’s assets and to distribute the sale proceeds to all creditors,” the statement said.
It added that after theme park operator Sim Leisure Group had purchased all non-moveable assets from the liquidator, the group had proceeded to negotiate a franchise licence with Kidzania Mexico.
“The decision by Sim Leisure to restart Kidzania in Singapore, as per their announcement dated June 12, is unrelated to DRH or any of our subsidiaries, as Rakan Riang’s operation licence was terminated in June 2020,” it said.
It also said that the premises where Kidzania Singapore operates is not owned by any of its subsidiaries and is instead owned by a third party.
Earlier today, Prime Minister Datuk Seri Anwar Ibrahim said that he will be holding talks with Khazanah over The Vibes’ report on how Kidzania was sold to Sim Leisure for a mere S$110,000 (RM379,398).
This is despite Khazanah and Boustead Holdings Bhd, which first launched Kidzania in Singapore in 2016, initially injecting RM165.52 million into the project.
According to a Singapore Business Times report, poor management of the theme park by Khazanah saw it record RM51.73 million in revenue and RM28.63 million in losses after tax.
Kidzania also owed RM184.17 million to creditors, with as much as 93% of the debt owed to TARH.
It is believed that this failed investment venture by Khazanah is not limited to its activities in Singapore, as it appears that similar circumstances apply to the Kidzania theme park in Malaysia, which was also purchased by Sim Leisure Group in 2020.
According to the Companies Commission of Malaysia documents spotted by The Vibes, TARH sold its 24.48 million shares to Sim Leisure Escape Sdn Bhd in 2021.
Although it was reported that the Sim Leisure Group acquired Kidzania Malaysia for RM3.8 million, it is believed that the project, which also involved Khazanah and Boustead Holdings, required an initial injection of RM90 million for construction and pre-operating costs.
According to a report by South China Morning Post, by the close of 2022, Kidzania Malaysia, which never made any money under its former management – had brought in RM6.46 million in profits for its new owners. – The Vibes, June 16, 2023
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