Ocean Park Corp., the operator of one of Hong Kong’s major tourist attractions, has reached an agreement with the city’s government to begin paying back HK$2.3 billion ($296 million) of debt from 2021 after its current bank loans are repaid.
The HK$2.3 billion facility will be subordinate to the company’s existing $720 million of debt, Chief Executive Officer Tom Mehrmann said in an interview in Singapore, where he was attending the Asian Attractions Expo.
The loan repayment conditions are “favorable” and “allow us to continue modest capital investments from cash reserve while we seek funding for larger investments,” Mehrmann said in a June 5 interview.
The attractions and amusement industry in the Asia Pacific region has grown at a faster rate than any other in the world, according to the International Association of Amusement Parks and Attractions. Attendance at both Ocean Park and Hong Kong Disneyland reached record highs in 2012, aided by investments in new tourism tourism offerings and a rise in visitors, mostly from mainland China, according to the Themed Entertainment Association.
Government-owned Ocean Park opened its doors to 7.1 million guests last year, a 20 percent increase from the year prior, Mehrmann said, adding he’s “confident” that figure will reach 7.5 million in 2013. Attendance at Hong Kong’s Disneyland climbed 13 percent to 6.73 million.
Ocean Park borrowed $720 million in 2006 to fund a project that was completed last year. It received a further HK$2.3 billion from the Hong Kong government in February to finance a new water attraction, Mehrmann said.
The amusement park will add a series of new attractions over the next four years amid rising competition in Asia, Mehrmann said. Planned additions include two new hotels and a 440,000 square-foot water theme park, according to the company.
Ocean Park will also install park-wide Wi-Fi and mobile- phone applications which will allow guests to access information about attractions using their handsets.
Mehrmann said the company intends to spend HK$120 million a year on maintenance of the park and new attractions, and plans to increase spending as it pays back its debts.
“Our payment schedules allow us to pay the loan down on schedule, still achieve a surplus, still make investments, while modestly growing our cash reserves,” Mehrmann said.
Editors: Linus Chua and Katrina Nicholas.
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