The theme park operator expects the compensation sum to have a material positive impact on its earnings for the current financial year

 

[SINGAPORE] Theme park operator Sim Leisure Group has reached a final settlement with Bandar Malaysia over a terminated theme park agreement, in a deal that is expected to have a &ldquo material positive impact&rdquo on the company&rsquo s earnings for the financial year ending Dec 31, 2025.

 

In a bourse statement on Tuesday (Sep 9) evening, the Catalist-listed company outlined the key terms of the settlement. 

 

Sim Leisure will receive an undisclosed &ldquo compensation sum&rdquo to be paid in full on or before Oct 30. 

 

In return, it will hand over the project site by Sep 15. The agreement also includes a waiver of any outstanding payments owed by Sim Leisure&rsquo s subsidiary to the owner. 

 

The settlement resolves a dispute stemming from an agreement signed in November 2023 by both parties to develop a theme park in Kuala Lumpur. Over a year later, Sim Leisure received a termination notice from Bandar Malaysia, and subsequently served a letter of demand for breach of agreement earlier this year.

 

The company stated that the receipt of the compensation is expected to have a material positive impact on its earnings per share and on the consolidated net tangible assets per share for the current financial year.

 

Sim Leisure owns and operates the Escape outdoor adventure park in Penang, the Escape Challenge indoor park at Paradigm Mall in Petaling Jaya, and KidZania Kuala Lumpur.

Founder and executive chairman Sim Choo Kheng&rsquo s hopes are for the company to be an operator that is &lsquo not necessarily the biggest, but the most successful in terms of efficiency and profitability&rsquo

 

WHEN indoor edu-tainment park KidZania Kuala Lumpur was looking for a buyer during the Covid-19 pandemic, Sim Leisure Group&rsquo s founder and executive chairman Sim Choo Kheng saw an opportunity to turn the ailing attraction around.

 

He had long admired the career role-playing aspect of the KidZania brand owned by a Mexican company and franchised globally, and believed it was a good fit for Asian families, who are concerned about their children&rsquo s future.

 

The group paid RM3.8 million (S$1.2 million) for the entire stake in the loss-making operator, a company linked to Malaysian sovereign wealth fund Khazanah Nasional.

 

Since Sim Leisure reopened KidZania Kuala Lumpur in 2021, the park has received around 230,000 visitors a year &ndash and has turned profitable, said Sim.

 

The Catalist-listed theme park operator is looking to replicate this success with KidZania Singapore, which reopened in May this year.

 

Sim Leisure acquired KidZania Singapore in 2023 from the liquidators of the operator, another Khazanah-linked entity, for RM380,000 &ndash a steep discount to the RM165 million that the entity reportedly invested into the park.

 

The company later clarified in a bourse filing that for this acquisition, it had dealt only with the liquidators of the entity that had gone into receivership, and that Khazanah was not involved in the deal. 

 

On the two KidZania parks, Sim told The Business Times: &ldquo I love the brand, and believed I could make it work as a business.&rdquo

 

This, he has done: The park in Sentosa is on its way to pulling similar visitor numbers as its Kuala Lumpur peer.

 

Sim noted that as the group was able to snap up these &ldquo bargains&rdquo during the pandemic, that period &ndash generally a difficult one for tourism operators &ndash was &ldquo not that bad&rdquo for Sim Leisure specifically. &ldquo Covid gave us a lot of opportunities&hellip and also weakened our competition, as many operators went out of business,&rdquo he explained.

 

The group was in the red during the pandemic, but was able to stay afloat, courtesy of its cash reserves and profits from its theme park construction business.

 

In particular, its building operations in Dubai were considered an essential service, given that construction fuelled the economy there, said Sim. The group did not disclose revenue and profit for that segment in its bourse filings in 2020 and 2021.

 

In 2020, the group completed the expansion of Bollywood Parks Dubai within the multi-themed leisure resort, Dubai Parks and Resorts. The following year, it finished the expansion of the resort&rsquo s Motiongate park.

 

Two decades in Middle East

The group&rsquo s foray into the Middle East goes back to 2004, when it set up its first remote office in Bahrain to lead the building of two water parks.

 

Since then, Sim Leisure has contributed to many attractions and parks there. The parks in which it has had a hand include Yas Waterworld in Abu Dhabi, built by state-owned real estate developer Aldar Properties, as well as Ski Dubai and Snow Oman, both part of Emirati real estate conglomerate Majid Al Futtaim&rsquo s portfolio.

 

Sim noted that as countries in the Middle East modernised, the demand for entertainment options went up. This demand is now concentrated in Saudi Arabia, where tourism infrastructure is going on in earnest under the umbrella of Vision 2030, a government programme to diversify the country&rsquo s economy.

 

He added that among theme park construction groups vying for contracts in the Middle East, Sim Leisure is likely the only one from South-east Asia &ndash putting the group in a good position to secure jobs because the group brings &ldquo Asian value&rdquo to the way it does business.

 

In its latest financial results, Sim Leisure posted a first-half net profit of RM10.9 million, up 23.2 per cent from RM8.8 million in the corresponding year-ago period. Revenue came in at RM86.8 million, up 56.2 per cent from RM55.6 million.

 

Topline growth was mainly driven by revenue from the theme attractions segment, which included work on theme park Six Flags Qiddiya in Saudi Arabia, and new and existing projects in the United Arab Emirates.

 

The great escape

While theme park construction is a burgeoning segment, Sim said that his passion lies in creating theme park concepts from the ground up. He has his sights set on becoming &ldquo the most successful leisure company in the world&rdquo .

 

He noted that theme parks are usually unprofitable &ndash even popular ones that appear to have large crowds. This is because they require huge investments to build up, and revenue from admissions and amenities within the parks may not be enough to cover the sum, he said.

 

His hopes, therefore, is for Sim Leisure to be a theme park operator that is &ldquo not necessarily the biggest, but the most successful in terms of efficiency and profitability&rdquo .

 

Alongside the two KidZanias, the group also has Escape, its original outdoor adventure park brand.

 

In Sim&rsquo s view, the new generations&rsquo preference for play is moving away from the more common rollercoaster-fronted theme parks, and into new forms that include outdoor play &ndash think high elements, ziplines and water features.

 

&ldquo I want to create&hellip a park based on how children used to play,&rdquo he said, referring to activities such as tree-climbing and swimming in rivers.

 

Interest was low when Escape Penang opened in 2012, but visitors have since warmed up to it the park with more than 30 games and rides now pulls in 230,000 visitors a year. The brand has expanded across Malaysia, including its outlets in Petaling Jaya and Ipoh.

 

&ldquo We are also looking at franchising (Escape) in South-east Asia and China,&rdquo he said.

 

The focus on these markets come as they are likely to have heightened demand for such leisure parks, due to their large populations with a growing budget for entertainment.

 

&ldquo The percentage of our disposable income spent on leisure in this part of the world is still very low. (But) we know it is going to grow &ndash not only in gross domestic product growth (terms)&hellip but the percentage of disposable income spent on leisure will grow,&rdquo he said.

 

Sim Leisure has also taken the Escape concept into malls for those who prefer to stay indoors. Escape Johor Bahru, for instance, is in Paradigm Mall, and offers activities such as a slingshot and climbing elements.

 

Delving into indoor entertainment, Sim Leisure is also banking on virtual reality (VR) to become the next big thing. In this vein, the company was granted master licensing rights from Australian company Haven XR to develop VR theatres in both China and Asean.

 

One example Sim raised was for the experience to simulate an outdoor rollercoaster &ndash which can be developed at a fraction of the space and cost.

 

He believes that it will be popular among the current generation of children, who have grown up around technology they are familiar with on-screen entertainment, &ldquo so they are so drawn to it, it&rsquo s natural&rdquo , he noted.

 

SINGAPORE &ndash Singapore-listed theme park developer and operator Sim Leisure Group (SLG), which will relaunch the KidZania Singapore attraction on Sentosa in 2024, is also planning to introduce two new theme park concepts to the local market.

 

These are SLG&rsquo s proprietary brand called Escape theme parks and a high-tech, cinematic storytelling experience known as Haven XR that uses virtual reality (VR) goggles to fully immerse visitors as they choose their own path in a 30-minute adventure movie.

 

In an exclusive interview with The Straits Times, SLG executive chairman Sim Choo Kheng said the company is in talks with interested parties for both.

 

Datuk Sim, who was speaking after a handing-over ceremony of the KidZania Singapore site at Sentosa&rsquo s Palawan Beach at the end of July, said that the renovation of the site will create a refreshed KidZania 5.0 version, among the first few in the world to incorporate novel occupations.

 

Children visiting the indoor theme park will be able to play the parts of technopreneurs and Internet influencers, as well as eco-literacy specialists and environmentalists, for example.

 

&ldquo We want to stay relevant to inspire children as they role-play this new genre of occupations,&rdquo he said.

 

Describing KidZania as edutainment, Mr Sim quipped that it is very much an Asian brand despite being conceptualised in Mexico, as the focus is on parents&rsquo aspirations for their offspring. He said that the top-performing parks are located in South Korea, Japan and Indonesia. Meanwhile, SLG holds the KidZania licence for Malaysia and Singapore.

 

&ldquo In Kuala Lumpur, often it is the parents who are queueing up for their kids to role-play as lawyers and doctors. Imagine their chagrin and dismay when their kids would rather play at the fun jobs, like being a window cleaner,&rdquo he chuckled.

 

Turning to the new projects, Mr Sim said there are already Escape parks in Malaysia. There is an indoor version at Paradigm Mall in Petaling Jaya known as Escape Challenge, while the outdoor version in Penang called Escape Adventure Park includes a water park. The company is evaluating several sites in Singapore and is yet to finalise the locations.

 

He said these upcoming theme parks are aimed at the age group of 15 to 35, and are also suitable for the corporate market, as they focus on character building and team bonding.

 

&ldquo At its core, it is designed for that kid in all of us. Optimised for smiles, it is low-tech, yet high-fun.&rdquo

 

Mr Sim added that online shopping has changed the retail experience irreversibly and this means that shopping malls have to reinvent themselves to attract shoppers back.

 

&ldquo Escape is becoming the new anchor tenant that large department stores used to be. It can attract footfall and the mall becomes a destination again,&rdquo he said.

 

SLG&rsquo s business model is for mall owners to put up 100 per cent of the $1.5 million capital expenditure to set up the theme park and then for them to take 10 per cent of the gross revenue.

 

&ldquo A few years ago, this wasn&rsquo t possible so we invested in the prototype in Petaling Jaya as proof of concept. Now, it is much easier to convince mall owners because the theme park actually supports the rest of the mall&rsquo s outlets,&rdquo he said.

 

For the latest concept of VR theatres, SLG recently tied up with Australian company Haven XR and was granted master licensing rights in both China and Asean to jointly develop the virtual experience across several rooms totalling 3,000 sq ft to 5,000 sq ft.

 

Similarly, the mall owners are expected to foot the investment cost of about $1 million for each theatre and in return, they get to keep 10 per cent of gross revenues.

 

Mr Sim said that up to four visitors can fit into each room and their virtual experience will be enhanced by temperature changes, as well as winds and smells.

 

He said that this concept will change the cinema-going experience because visitors will no longer just watch the movie passively, but will instead become the starring heroes.

 

Not only can visitors choose their artificial intelligence-generated avatars, but they can also choose different paths within the story. Each path is original so they can repeat the experience for different endings. Visitors will be able to take the movies home and share them online.

 

He expects to roll out the first Haven XR Cinema Centre in Singapore and Kuala Lumpur concurrently in the first quarter of 2024 as the lead time to set these up is only three months.

 

&ldquo While a real theme park requires the entire structure to be torn down, we can put a roller coaster inside a room at a fraction of the cost and it can be easily changed into something else with a flick of a switch,&rdquo he said.

 

THEME park operator Sim Leisure announced on Monday (Jun 12) that it has secured an agreement with Sentosa Development Corporation to lease 31 Beach View #01-01/02, where the discontinued KidZania was located, for five years with an option to renew the lease for another five years.

 

It plans to refurbish the place via its newly incorporated and wholly-owned subsidiary, Kids Edutainment, with a projected capital expenditure of S$3 million. This is in addition to an earlier S$110,000 committed in the purchase of all non-movable assets, fittings and fixtures at the site.

 

The expenditure will partly be funded by &ldquo contributions from third-party sponsors participating in the KidZania Singapore Facility&rdquo , the company said.

 

Fitting out works are expected to take six months, starting from Aug 1. The company expects to reopen the attraction in the first quarter of 2024, barring any unforeseen circumstances.

 

Sim Leisure said the new concept for the revamped KidZania will include the latest design, theming and role-play activities, a new toddler-exclusive area and adult events lounge, among other new introductions.

 

The facility sits on a site area spanning approximately 7,521.97 square metres.

 

While the asset purchase and subscription of shares in Kids Edutainment are not expected to have any material effect on the consolidated net tangible assets per share and earnings per share of the company for the financial year ending Dec 31, Sim Leisure said it expects the refurbished KidZania&rsquo s operations to contribute positively to the performance of the company.

THEME park operator Sim Leisure on Thursday (Jan 19) announced that it will register &ldquo substantial&rdquo comprehensive profit for FY2022 ended December, reversing the year-ago loss.

 

The turnaround is due to an increase in the company&rsquo s revenue derived from theme park operations, following the easing of pandemic restrictions by the Malaysian government.

 

Another factor is the cooperation fee income from Sim Leisure Gulf Contracting, arising from the cooperation agreement entered between the company&rsquo s 60 per cent-owned subsidiary, Sim Leisure Creative, and SL Gulf.

THEME park operator and developer Sim Leisure Group on Wednesday said it plans to sell new ordinary shares to two of its controlling shareholders at a discount of 5.9 per cent, to raise S$3.6 million.

 

One of the subscribers is the company' s non-independent non-executive director Tan Boon Seng. His stake will increase to 26.95 per cent of the enlarged share capital, from 18.18 per cent if the proposed share subscription is completed.

 

The other controlling shareholder is Desamal Capital, an associate of Mr Tan' s, which will see its stake rise to 25.74 per cent of the enlarged share capital, from 17.5 per cent. Desamal Capital will subscribe for a majority of the newly issued shares, paying S$3.4 million out of the S$3.6 million.

 

Both shareholders have agreed to subscribe for a total of 17.7 million new shares at 20.5 Singapore cents apiece - which represents a 5.9 per cent discount to the company' s volume weighted average price of 21.78 Singapore cents, based on trades done on Sept 1 - the last full market day before the subscription agreement was signed.

 

Some 70 per cent from the proposed subscription will be used to fund the group' s potential growth and expansion or diversification. The remaining 30 per cent will be used for general working capital.

 

Sim Leisure said in light of present market conditions, there are limited financing options available to the group. It will convene an extraordinary meeting to seek shareholder approval for the proposed subscription.

 

Desamal Capital is an investment holding company that owns businesses in food and beverage (F& B), tertiary education and personal grooming products.

 

F& B brands it owns include Dragon-I, Canton-I, Ho Min San and the Japanese franchise Yayoi. At present, it has about 40 restaurants spread over Peninsular Malaysia and the state of Sabah.

 

It also owns the Advance Tertiary College which has one campus in Kuala Lumpur and another in Penang, as well as personal grooming brands Bad Lab and Good Virtues.

SIM Leisure Group $ Sim Leisure: URR 0% ' s unit Sim Leisure Cameron has inked an agreement for the project management of the construction as well as the operation and maintenance of an environmentally sustainable theme park in Cameron Highlands, Malaysia.

 

The Catalist-listed company said it will jointly develop the theme park with the project owner Hektar Muda Assets, and also operate, manage and maintain the theme park on behalf of the owner for 30 years, with an option to mutually extend such services by 10 years.

 

Hektar Muda, a Malaysia incorporated company mainly engaged in property development, oil palm cultivation and sub-division of marketable plantation plots for sales, owns Hektar Muda Assets and the land to be used for the theme park development.

 

In its regulatory statement to the Singapore Exchange on Friday, Sim Leisure said the theme park is expected to open one-and-a-half years after construction works begin.

 

If its opening fails to take place as scheduled solely due to Sim Leisure' s fault, Hektar Muda Assets is entitled to liquidated damages of RM1,000 (S$322.60) per day of delay, capped at RM180,000.

 

The cost of constructing the theme park will be funded by Hektar Muda Assets but if it exceeds RM15 million, Sim Leisure will need to finance the cost that exceeds this amount by way of capital injection into Hektar Muda Assets.

 

Through collaborating with Hektar Muda, the theme park operator said it is able to boost its top line without straining its balance sheet, elevate its status as the " leading" developer and operator of retro-eco theme parks in Malaysia, and expand the Escape brand of theme parks.

 

Also, it will charge fees for the management of the project as well as for the design and coordination of the detailed/architectural design of the theme park.

 

Sim Leisure will, however, need to make payments at an agreed percentage to Hektar Muda Assets for running the theme park as well as be responsible for the operating expenses.

 

The deal is conditional upon several conditions being fulfilled within six months from the date of the agreement.

 

The counter ended unchanged at S$0.199 on Friday, before the filing was made to the bourse.

 

Between March 22 and April 5, Sim Leisure Group founder, executive director and CEO Sim Choo Kheng acquired 201,000 shares of the Catalist-listed company for a consideration of S$42,226.

 

At an average price of 21.0 cents per share, this increased his total interest in the developer and operator of theme parks from 61.76 per cent to 61.89 per cent.

 

Mr Sim began his career in 1990 as a theme park employee before he took the big step to set up his own business in 1993 first by providing theme park management services then theme park design and contracting. The ensuing business journey took him across the globe for the next 28 years.

 

Mr Sim and his team had worked on more than 100 major theme park projects before he took Sim Leisure' s ESCAPE theme park division for listing on the Catalist board on March 1, 2019.

 

Mr Sim' s spouse, Silviya Georgieva, also serves as executive director of Sim Leisure Group, leading the organisation' s planning, implementation, and control of quality assurance programmes while reducing overall operating costs.

 

Two of their three sons are also involved in Sim Leisure Group' s marketing and park operations.

 

For its FY20 (ended Dec 31) results released on March 2, the group recorded a profit after tax of RM8.13 million (S$2.64 million), compared to a profit after tax of RM0.23 million in FY19.

 

Excluding the gain on the bargain purchase arising from the business combination with respect to the newly acquired subsidiary, Rakan Riang (an authorised licensee of KidZania), the group would have made a loss after tax of RM8.56 million for FY20.

 

With its FY20 results, the group noted that it had been in active negotiations with KidZania Headquarters in Mexico, as it intends to expand the KidZania franchise to other Asian countries.

 

The group added that it was in active negotiations with mall operators to construct adventure parks that are similar to the ESCAPE Challenge in Paradigm Mall in other malls in the Malaysian state of Selangor.

 

Prior to the lockdowns of 2020, the ESCAPE theme park had welcomed approximately 205,000 visitors in 2019, up from 185,000 in 2018 and 112,000 in 2017.

 

Awarded the TripAdvisor Certificate of Excellence every year between 2014 and 2019, the ESCAPE theme park was consistently ranked the No. 1 Theme Park in Malaysia by TripAdvisor.

SIM Leisure Group, through its subsidiary, has obtained a loan of up to RM7 million (S$2.3 million) from its controlling shareholder Tan Boon Seng, in part to fund the group' s proposed acquisition of the operator of family attraction KidZania in Kuala Lumpur.

 

The loan agreement, which was entered into on Nov 20, comprises a term funding of RM5.3 million and a funding portion of RM1.7 million.

 

The term funding, which will be used for the acquisition, will be made available to subsidiary Sim Leisure Escape for up to 24 months from the date of the loan agreement.

 

The funding portion, which will be used for the group' s general working capital purposes, will be made available for up to 60 months from the date of the first draw-down of the term funding.

 

The loan holds an interest rate of 8 per cent.

 

Sim Leisure is looking to acquire the entire stake in loss-making Rakan Riang, KidZania' s licensee, for RM3.8 million.

 

Rakan Riang is a joint venture between Themed Attractions Resorts & Hotels (the leisure and tourism arm of Malaysian sovereign fund Khazanah Nasional) and Malaysia-listed Boustead Holdings Berhad.

 

Sim Leisure said it had used its " best endeavours" to explore other financing options, but these were limited in light of present market conditions.

 

The lender, a non-independent, non-executive director of the company, has a direct and deemed interest in about 0.68 per cent and 17.5 per cent in the group. The loan agreement is thus deemed to be an interested-person transaction.

 

Sim Leisure has requested to lift the trading halt that it called for on Monday. Shares in the group last traded at 22.5 Singapore cents on Nov 19.

 

The Singapore outlet of Kidzania closed in the middle of this year and has commenced liquidation. The KidZania theme park gives children a taste of careers such as firefighting, window washing, medicine and journalism through role-playing in an interactive mini-city.

 

The KidZania brand is an international franchise with 29 facilities in 22 countries worldwide, said its website. These include outlets in cities such as Kuala Lumpur, Bangkok and Manila.

 

INSTEAD of obtaining shareholders' approval before it buys the loss-making operator of KidZania, Sim Leisure will be seeking their approval by way of ratification after the deal has been completed.

 

Sim Leisure had applied to the Singapore Exchange (SGX) for a waiver from strict compliance of Catalist rules which require such prior approval.

 

The bourse operator on Thursday said it has no objection to this waiver, but the transaction must be ratified at an extraordinary general meeting (EGM) within three months from the proposed acquisition' s completion date.

 

The company must also disclose in the shareholders' circular why the deal is in the best interests of Sim Leisure.

 

The theme park developer and operator this month proposed to acquire Rakan Riang, which operates family attraction KidZania, for RM3.8 million (S$1.2 million).

 

Rakan Riang' s pre-tax losses amounted to RM1.4 million last year and RM4 million for the first half of this year. It is an 80-20 joint venture between Malaysian sovereign fund Khazanah Nasional' s leisure and tourism arm and a unit of Malaysia-listed Boustead Holdings.

 

Rakan Riang operates a KidZania outlet at the Curve NX building in Petaling Jaya, Selangor.

 

Sim Leisure said it asked SGX for the waiver because of the time-sensitive nature of the transaction.

 

The proposed acquisition has to be completed urgently " due to circumstances of the target" , and the sellers may also withdraw the offer if the deal is not completed in time, Sim Leisure noted in a filing on Thursday night.

 

Therefore, if the company had to seek prior approval from shareholders, this could lower its chances of success.

 

Sim Leisure added that there will be no material change in its risk profile after the acquisition, and thus there will be no prejudice to shareholders if the completion takes place before the company gets their approval.

 

Reasons for this include: there will not be any change in control of Sim Leisure the group' s core business will not change there is no significant adverse impact on the group' s earnings, working capital and gearing and there is no expansion of the business to a new geographical market and/or business sector.

 

Moreover, Sim Leisure' s substantial shareholders - chief executive Sim Choo Kheng, Tan Boon Seng and Mr Tan' s restaurant chain operator Tropika Kiara - with a combined 79.9 per cent stake have irrevocably undertaken to vote in favour of the proposed acquisition.

 

The three substantial shareholders also undertook not to decrease their current shareholdings in the company until after the EGM has been convened.

 

That means the resolution for the deal would have passed even if a shareholders' meeting were held to approve the acquisition before its completion.

Theme park developer will apply to SGX for waiver from requirements relating to very substantial acquisitions

 

THEME park developer and operator Sim Leisure Group has proposed to acquire the operator of family attraction KidZania in Kuala Lumpur for RM3.8 million (S$1.2 million). Pending approval from the Singapore Exchange (SGX), Sim Leisure hopes to avoid both seeking shareholders' approval for the deal and seeking an independent valuation of the asset.

 

The company that Sim Leisure is acquiring, Rakan Riang Sdn Bhd (RRSB), recorded a pre-tax loss of RM1.4 million last year. For the first half of this year, its pre-tax loss was RM4 million.

 

Sim Leisure recorded a pre-tax loss of RM2.5 million for H1 2020. Because the losses of RRSB are more than double the losses of Sim Leisure, Sim Leisure is required to seek approval from shareholders. It must also appoint an independent party to value the assets.

 

But in a statement, Sim Leisure said its board believed the management team " had negotiated the most competitive purchase price and terms" in the best interests of the company and shareholders.

 

Sim Leisure will therefore apply to SGX for a waiver from the requirements relating to very substantial acquisitions.

 

Obtaining this VSA waiver is one of the conditions precedent for the proposed acquisition.

 

RRSB had net tangible assets (NTA) of RM13.1 million as at Dec 31, 2019. Its NTA was RM9.2 million as at June 30, 2020.

 

KidZania is a Mexico-based brand of indoor educational and entertainment centres for children.

 

RRSB, which operates a franchised outlet at the shopping mall Curve NX, is an 80:20 joint venture between Themed Attractions Resorts & Hotels (TARH) - the leisure and tourism arm of Malaysian sovereign fund Khazanah Nasional - and Malaysia-listed Boustead Holdings.

 

Khazanah also owns 80 per cent of Rakan Riang Pte Ltd, the company that was operating the now-closed KidZania Singapore. Rakan Riang Pte Ltd is currently in liquidation.

 

Rakan Riang Pte Ltd owes about S$50 million to TARH, The Business Times reported last month. KidZania Singapore had chalked up losses in the four years it operated in the city-state, and its other creditors include the Singapore Tourism Board, the Sentosa Development Corporation and the Ministry of Education.

 

Despite RRSB' s losses, Sim Leisure said that the acquisition would have boosted its FY2019 earnings if it had been completed on Jan 1, 2019.

 

Sim Leisure' s earnings per share would have been 5.12 Singapore cents, instead of 0.06 cents, while net profit would have increased to S$6.6 million from S$77,000.

Frustration usually breeds opportunities for entrepreneur Sim Choo Kheng.

 

Nearly three decades ago, feeling like a square peg in a round hole and grappling with workplace politics, Mr Sim realised that he had to be his own boss, whatever the cost.

 

" Being creative, stubborn and fiercely individualistic, and wanting to do things my way without compromise - it was basically a recipe for career disaster," recalled the founder and chief executive of listed theme park developer and operator Sim Leisure Group.

 

Mr Sim, 54, raised RM14,000 by selling his car and employed his expertise in the leisure industry to offer management consulting services to theme park operators.

 

" That (was) the best decision I ever made. Sometimes, to succeed, you need to create a situation where there is no option to turn back, only move forward," he added.

 

Nonetheless, it proved a tumultuous ride: " I failed miserably in the first few years and was forced to look for other jobs to supplement my income. But 27 years later, I have learnt how to emerge a winner."

 

Over the years, he has propagated the Sim Leisure brand through his involvement in more than 100 key projects worldwide, including Lost Paradise of Dilmun in Bahrain, Legoland in Denmark and Malaysia, and Universal Studios in Singapore.

 

Sim Leisure, which listed on the Catalist board in March last year, showcases its own Escape theme park brand in Penang that was built over seven years across 29 acres (12ha).

 

The park welcomed about 200,000 visitors last year, up from 185,000 in 2018 and 112,000 in 2017. It has also been consistently ranked the No. 1 theme park in Malaysia by Tripadvisor.

 

" When you talk about theme parks, it conjures up images of roller coasters and conventional movie-based entertainment," Mr Sim said.

 

However, an environmentally friendly Sim Leisure park offers no movie spin-offs or mechanical rides. Instead, there are climbing zones, obstacle courses, zip lines and waterslides.

 

" It' s based on happy memories of my childhood, when I was growing up in the kampung, climbing trees and swimming in the river," Mr Sim said.

 

" Our generation has gone for broke in the way we live - many kids, as well as adults, are deprived of real play time. We need to engage in healthy outdoor activity and return to the basics."

 

The Escape concept is focused on optimising enjoyment through low-tech, creative, play-centric attractions, which translate into lower investment outlays and operating overheads.

 

" Fun doesn' t demand an astronomical price tag," Mr Sim noted. " The entire Escape theme park in Penang required capital expenditure of approximately $20 million - a fraction of the cost of a conventional theme park."

 

Sim Leisure reported a 5 per cent rise in revenue to a record RM21.9 million (S$7.1 million) for the 12 months to Dec 31 last year. Excluding one-off listing-related and other expenses, core net profit - generated purely from its theme park operations - declined 3 per cent to RM5.5 million.

 

The firm plans to unveil Escape Challenge, an indoor sports centre in Petaling Jaya' s Paradigm Mall, possibly later this year at a development cost of $1 million.

 

" There are huge opportunities for indoor theme parks in malls - many retail landlords are struggling with stagnating sales, and are seeking fresh attractions to pull in the crowds," Mr Sim said.

 

He is also eyeing South-east Asia, China and South Asia.

 

" Although Penang is a small island with a population of 1.8 million, we are profitable. How will this concept perform if we export it to larger markets like Guangzhou, Singapore or Jakarta?" he asked.

 

" With an entry price of $40 per head, we' re selling a product that the masses can well afford."

 

In February, the company signed an agreement with Sri Lanka-listed Elpitiya Plantations to develop and operate theme parks in the nation under the Escape brand.

 

" I see tremendous opportunity in Sri Lanka," Mr Sim said.

 

" China is another target market - it has a large middle-class population with high disposable incomes. The potential is immense."

 

Right now, its biggest challenge is Covid-19. " It' s a problem that' s not unique to us. Life will not be easy in the near term."

 

Mr Sim added that the group is using the downtime to spruce up its outdoor theme park.

 

" Our maintenance teams have been very busy with upgrades - we' ve not had the opportunity to carry out this kind of improvement works over the last seven years."

 

He is confident demand will bounce back once lockdowns ease. " Escape is more of a sports and recreational concept than a tourism product - we rely more on the domestic market as 80 per cent of our visitors are locals."

 

The crunch from the pandemic could also be a blessing in disguise. " It means less competition as parks that are not properly managed will have to shut down."

 

It would also offer a reality check for investors and operators.

 

" After a crisis, investors tend to be more cognisant of the value of money," Mr Sim noted. " When money becomes a problem, people turn frugal - they get real."

 

Still, it remains an uphill battle convincing bankers and potential investors that the Escape concept is viable.

 

" Most people have a conventional mindset, constantly comparing us with movie-based theme parks. We' ve been misunderstood for too long," Mr Sim noted.

 

But the upside is that the firm retains its first-mover advantage.

 

" We' re way ahead of our peers. A competitor building a multibillion-dollar theme park is not a threat to us - we belong to a different genre altogether," he said.

 

In the meantime, Mr Sim continues to dream big. " My life has a destiny, which is to build Escape into the most successful theme park brand in the world."

 

He hopes his three sons, aged 13, 23 and 26, will pick up the torch eventually. The older two are involved in marketing and park operations, while wife Silviya Georgieva Georgieva is an executive director.

 

Mr Sim' s mantra to his children is: Always question, and look beyond the surface.

 

" Young people can be very passive and unquestioning - I don' t want my kids growing up with that kind of attitude," he said.

 

" The world is full of conformists and conventional thinkers. But if you develop an inquiring mind and analytical skills, you' ll be able to stand out - and shine."

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