The cash flow of the Ocean Park is less than the September rescue plan to be reduced to 5 billion and shelved to build seven major parks

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Written by: Liang Huanmin

2020-05-11 13:28

At the beginning of the year, Ocean Park submitted a proposal to the Hong Kong government to allocate 10.64 billion yuan to subsidize the park ’s new development plan and overcome financial difficulties. However, it was estimated that the suspension of opening due to the impact of the epidemic was not considered.

After nearly four months of scrutiny, the Hong Kong Government announced today (11th) the new plan and formally applied for funding from the Legislative Council, mainly to assist Ocean Park to overcome immediate financial difficulties so that it can maintain its operations. In fact, Ocean Park, which has suffered losses many times in recent years, has been closed for more than 100 days due to the epidemic and lost 1 million passengers. The chief executive officer of Ocean Park, Li Shengzong, publicly stated last week that the current capital flow cannot be close to September. It is understood that Ocean Park and the Hong Kong government will halve the funding application, that is, only inject about 5 billion yuan into Ocean Park, and the construction of the seven parks originally planned for development will be temporarily suspended.

It is known that Ocean Park has decided to halve the appropriation applied to the Hong Kong Government, that is, to about 5 billion yuan. (Profile picture / photographed by Gao Zhongming)

According to the financial statement submitted to the Legislative Council by Ocean Park earlier this year, in the fiscal year 2019-20, the cash deficit generated by Ocean Park ’s operating activities will exceed 600 million yuan; in addition, the fiscal 2016-17, 2017-18 and 2018-19 The annual number of visitors remained between 5.7 million and 5.8 million. In the second half of 2019, due to continued social events, the number of visitors to Ocean Park declined sharply. The number of visitors from July to December was only 1.9 million, a significant drop of more than 30% compared with the same period in 2018, an unprecedented decline. If the decline in the second half of 2019 continues, Ocean Park expects the number of visitors in the 2019-20 financial year to fall to 3.3 million, which is more than 40% lower than the previous year.

In addition, the estimate also mentioned that Ocean Park needs to repay the commercial loans previously obtained for the redevelopment plan 2 and the Dashuwan development project within a short period of time in the future and the next financial year (i.e. (2019-20 and 2020-21 financial years), the total repayment amount reached 2.3 billion yuan, but according to the current financial situation of the Ocean Park Company, it is no longer able to repay the loan. Although Ocean Park has obtained 1 billion yuan of revolving loans in the private market, if it cannot obtain any additional financial resources, it is expected that its cash balance will be exhausted within this year. However, the above estimates and financial conditions are calculated before the outbreak begins. Take into account the financial losses that the park needs to close.

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The Secretary for Commerce and Economic Development Qiu Tenghua said on Saturday (9th) that the funds to be re-launched will be adjusted, describing that the "Salvation Plan" may not be able to reach the sky in one step. The new development plan of Ocean Park must still be subject to short-term and medium-term The number of domestic tourists cannot rise back to the normal situation. The park can reflect on how to use this time to reposition. He also pointed out that I believe that the public does not want to see the completion of the Ocean Park, so I hope to "save the park" and "endure this winter" for the park. It also means that although the epidemic has eased, it should not be too dependent on mainland and overseas visitors.

The Secretary for Commerce and Economic Development Qiu Tenghua said on Saturday (9th) that the funds to be re-launched will be adjusted, describing that the "Salvation Plan" may not be able to reach the sky in one step. (Profile picture)

Last Friday (8th), Li Shengzong pointed out that in the past 100 days since the anti-epidemic, the park has lost more than 1 million visitors. In addition, due to the disinfection procedures and anti-epidemic products before the reopening, it has increased operating costs and is still in use. The staff ’s unpaid leave and high-level salary reduction measures reduce costs. The Ocean Park, which previously revealed that the capital flow is insufficient, lamented that the current situation "may not be until September", and is now fully prepared for the park ’s reopening ‪, hope The government can reopen within two weeks with the cooperation of various parties, when the measures to restrict the flow of people have been eased, other restrictions have been reduced, and expert advice has been obtained.

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