Village Roadshow seeks government support as theme parks reopen

Warner Bros Movie World is scheduled to reopen on July 15. Picture: AAP
Warner Bros Movie World is scheduled to reopen on July 15. Picture: AAP

Takeover target Village Roadshow has revealed that it is in talks with the Queensland government over funding that would support its theme parks as they prepare to reopen following the coronavirus crisis.

]The unconventional measure comes as private equity group BGH Capital continues its due diligence on the company, for which it made a takeover offer last month.

Village this month granted the Ben Gray-led BGH more time to undertake due diligence on its operations as part of its $468.5m takeover proposal. A deadline of June 30 is fast approaching but the private equity house could also seek a further two-week extension.

However, US activist investor Mittleman Brothers last month dealt a blow to BGH’s plan, labelling its takeover proposal opportunistic and criticising it for taking advantage of the coronavirus crisis.

Mittleman Brothers chief investment officer Chris Mittleman called BGH’s takeover play a “shameful act” under the circumstances and he has since bumped up his stake in Village to 7.49%.

Village said it was seeking to increase its debt financing facilities and disclosed it was in “advanced discussions” with its existing bank syndicate and the Queensland government.

Any funding provided by the Queensland government would be used to support Village’s theme parks in the state, and would be directed towards retaining employees, safety and maintenance and capital expenditure projects.

Village‘s lenders have already confirmed that they will not apply financial covenants as at June 30.

The company said it was taking measures to conserve capital but noted the increase in debt facilities would give it liquidity as it moved into a phased reopening of its theme parks and cinemas, which shut when the COVID-19 pandemic swept Australia.

The Gold Coast theme parks – Warner Bros Movie World, Sea World, Wet‘n’Wild and Paradise Country – have had their COVID safety plans approved by the Queensland government and are able to reopen under those plans at up to 50 per cent capacity.

Sea World and Paradise Country will reopen on Friday, Australian Outback Spectacular on July 3, and Warner Bros Movie World and Wet’n’Wild on July 15. Topgolf Gold Coast reopened on June 12.

Village‘s cinema circuit in Tasmania has reopened, and it plans to reopen its regional cinema circuit in Victoria later this week. Metropolitan Melbourne cinemas could follow by late July, provided coronavirus restrictions allow.

Village‘s cinema circuit in other states, including those operated by partner Event, are expected to reopen in early July.

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