Dubai Parks and Resorts is seeking to raise AED1.68bn ($457mn) through the rights issue to fund construction of its Six Flags theme park which is scheduled to open by the end of 2019 with 27 rides and attractions.
An agreement has been reached between majority shareholder Meraas and certain investors to acquire a portion of Meraas’ rights, in addition to more than 80 percent of the public shares, should they not be subscribed for by the holders of rights.
Meraas will continue to be the majority shareholder and remains committed to the long-term success of Dubai Parks and Resorts, a bourse statement said.
The rights issue will increase the issued share capital of Dubai Parks and Resorts to AED 7,999,912,670 through the issue of 1,678,084,962 new shares with a nominal value of AED1. The issue has been approved by the UAE’s Securities and Commodities Authority.
The total projected cost of the Six Flags Dubai project is a shade over AED 2.6bn. Earlier this
month Dubai Parks & Resorts secured a AED 933mn ($254mn) loan to fund the remainder of the project.
Raed Kajoor Al Nuaimi, Chief Executive Officer, Dubai Parks and Resorts, said, “We are well positioned to benefit from two things: firstly, we’re based in Dubai, which is the world’s fourth favourite travel destination, and we will be the first integrated theme park destination in Dubai.
“Secondly, Dubai’s infrastructure – the expansion of Dubai International Airport and the Metro line – as well as easier visa regulations will encourage more visitors to come to the UAE. There is a significant gap in the regional market and the Indian sub-continent for theme park destinations and Dubai Parks and Resorts is uniquely positioned to benefit from this.
“The Rights Issue gives our existing shareholders and new shareholders the opportunity to share in Dubai Parks and Resorts’ growth strategy. We have already successfully secured AED 993 million in non-recourse debt financing.
“In addition, the commitments we have received from the Committed Investors to the Rights Issue illustrates the confidence regional institutional investors have in Dubai Parks and Resorts and its growth potential. Six Flags Dubai will enable Dubai Parks and Resorts to offer an element of thrill, enabling us to target new market segments, tastes, and age groups.”