Treasury to prop up Movie World

MOVIE World owner Village Roadshow has revealed it has secured $70 million in new funding from its lenders and the Queensland Treasury, providing the company with enough cashflow to get it through the next 12 months.

Village, which remains in talks with BGH Capital on a potential $468 million takeover, has been locked in negotiations with its lenders and the Queensland Government for months seeking extra cash to combat the COVID-19 downturn.

The company, which has 5000 staff on the Gold Coast, was forced to shut its parks on March 23 and had been bleeding up to $15 million cash each month. Movie World and Wet’n’Wild reopened on July 15 and Sea World on June 26.

The company, in an ASX statement on Thursday, also said it had been able to reduce its cash burn since reopening the parks. It said its net debt position as of June 30 was $280 million and the company had $40 million in cash available.

The new $70 million facility is currently undrawn. Village said $43 million of the new facility is current for 12 months with the balance running for five years.

Village, as part of the funding deal, has given an undertaking to raise a minimum of $35 million via new shareholder equity or equity-like instruments. This must be completed by the earlier of the half-year results announcement in February or three months after the termination of a transaction with BGH Capital.

It also said park visitors, since the attractions opened at 50 per cent capacity, had come mostly from Queensland. Village said work continues on its New Atlantis precinct at Sea World. It said it continued to exercise “strict controls” over expenditure while taking advantage of increasing visitor numbers.

The company announced its fourth extension to talks with BGH. Shares closed down 3c to $2.10.