LONDON: DXB Entertainments (DXBE) has confirmed the restructuring of its 4.2 billion dirham (Â£1.1 billion) debt facility it used to finance phase one of Dubai Parks and Resorts, one of the largest theme parks in the Arabian Gulf.
The company has secured a three-year moratorium on principal repayments and covenant testing with its lenders.
It will continue to pay interest on the debt as required under the original agreement, according to a filing to the Dubai stock exchange.
The company is also planning to enter into a 1.2 billion dirham convertible instrument financing structure with its majority shareholder Meraas. Plans will be presented to shareholders on 25 April. An existing 700 million dirham subordinated facility agreed with Meraas last year will be rolled into this new agreement.
The announcement comes as DXBE published its consolidated full-year results for 2017, confirming a net loss of 1.12 billion dirhams. Total revenues for the year reached 552 million dirhams, according to a Dubai Financial Market (DFM) filing on March 26.
While the company reported lower revenues of 76 million dirhams for 2016, the park only opened late that year and the full-year results reflect just three months of operations. DXBE posted a net loss of 485 million dirhams for that time period.
Revenues started to pick up in the fourth quarter of 2017, following the completion of all rides and attractions in the park, including the â€œThe Hunger Gamesâ€� attractions.
Revenue reached 157 million dirhams, marking an increase of 37 percent compared with the third quarter 2017.
â€œIt is important to remember that our business is still in its infancy, having just completed the last rides and attractions at the end of last year,â€� Mohamed Almulla, CEO and managing director of DXBE said in the DFM filing.
â€œThe staggered opening of the parks has had an impact on the target contribution of overseas visitors to our visitor mix, which has impacted revenue.
â€œTherefore, we believe that while we saw significant progress in the last quarter, our 2017 results are not indicative of our ability to drive future performance. 2018 will be the first year of full operations for the destination and should be the year we are judged on.â€�
Total visits to the DXBE theme parks neared 2.3 million in 2017, with the fourth quarter delivering close to 796,000 visits, a 66 percent increase on the third quarter.
The rise in visitor numbers was partly widely expected with the fourth quarter a typically high tourist season in the emirate. DXBE also revised its pricing strategy last September to drive up visit numbers to the parks, and reviewed its marketing efforts to target Gulf residents and some key international markets.