Embattled entertainment park owner Village Roadshow is taking immediate action to reduce its mounting debt via the sale of its Sydney Wet‘n’Wild theme park and a $50 million capital raising.
Australia’s largest theme park operator halted trading to announce that it is undertaking a cost saving program along with a $50 million equity raising to pay down its debt.
The company will raise $87 million from the sale of the Sydney Wet‘n’Wild and the $50 million capital raising, reducing its net debt in anticipation of a $375 million revolving credit facility that matures in December 2019.
In an ASX statement the company said that its 2018 financial year result “continues to be impacted by the Dreamworld tragedy” and that the underperformance of certain film titles this year will impact its film distribution business.
The company remains positive, however, that despite a lack of quality titles last year a “stronger slate of blockbuster films” in the new financial year will lead to an uplift in earnings.
“Film Distribution’s performance reflects the ongoing impact of piracy and decline of the physical (DVD and Blu-ray) market, as well as underperformance of certain film titles,” the company said.
Village Roadshow offloaded its Sydney Wet'n'Wild theme park for about $40 million to Spanish entertainment park operator Parques Reunidos, losing about $25 million on the sale.
The company also sold 154-hectares of land on the Gold Coast to reduce its debt levels in September 2017.
The company is targeting in excess of $10 million of cost savings in 2019, which will include a 25 per cent reduction in director’s remuneration. Village’s co-chief executives Robert Kirby and Graham Burke were paid $1.59 million and $1.41 million respectively last year.
About $8 million in costs were cut in 2018.
Hero image: Graham Burke at Warner Bros Movie World on the Gold Coast. Picture: Luke Marsden
