(Yicai Global) Oct. 18 -- Shares of Haichang Ocean Park Holdings rose after the leading Chinese theme park operator said it plans to raise cash to pare its debt by selling assets to MBK Partners Fund V, one of the biggest private equity funds in Asia, for CNY6.5 billion (USD1 billion).
Haichang Ocean Park [HKG:225] closed 3.8 percent up today at HKD1.73 (22 US cents), recovering from a fall of as much as 7 percent in the morning. The stock resumed trading yesterday after being suspended on Oct. 15 pending an announcement.
Due high debt levels and mounting losses since the outbreak of the pandemic, Haichang Ocean Park will sell its theme parks in the Chinese cities of Wuhan, Chengdu, Tianjin, and Qingdao to MBK Partners Fund V as well as a 66 percent stake in another in Zhengzhou, the Shanghai-based firm said in a statement late yesterday.
“The directors believe that the sale of the target companies at a relatively favorable market price would generate a considerable sum of cash which could be directed toward repayment of a certain amount of debt that should reduce the remaining group’s asset-liability ratio and sustain the remaining group’s operations,” the company said.
Haichang Ocean Park’s revenue fell 58 percent last year to CNY1.2 billion (USD187.5 million), with an overall gross loss of CNY129 million (USD20.1 million) and a debt ratio of 82 percent.
The sale proceeds will be used to repay loans on the four theme parks and to upgrade and expand parks in Shanghai and Sanya, the firm said, adding that after the deal is completed it will become a service provider with a main business in planning and design, brand licensing, and hosting services for other theme parks.
Founded in 2002, Haichang Ocean Park mainly runs theme parks and ancillary commercial properties. It has 10 parks in China, located in Shanghai, Sanya, Dalian, Qingdao, Chongqing, Chengdu, Tianjin, Wuhan, and Yantai. It went public on the Hong Kong Stock Exchange in 2014.
Editor: Futura Costaglione