16-6-2023 (KUALA LUMPUR) Less than a year after it emerged that sovereign wealth fund Khazanah Nasional Bhd sold Iskandar Malaysia Studios for a fraction of its investment, it seems the same fate has befallen its stake in Kidzania.
Theme park operator Sim Leisure Group recently acquired Kidzania Singapore after the children’s attraction went into liquidation. The Singapore-based company obtained all of Kidzania Singapore’s fixed assets from administrators for a mere S$110,000 (RM379,398).
In 2016, Khazanah and Boustead Holdings Bhd launched Kidzania Singapore, injecting S$48 million (RM165.52 million) into the project. However, poor management by Khazanah resulted in revenues of just S$15 million (RM51.73 million) and losses after tax of S$8.3 million (RM28.63 million) in its first year, the Singapore Business Times reported.
Kidzania Singapore also owed creditors S$53.4 million (RM184.17 million), 93% of which was due to Theme Attractions Resorts & Hotels (TARH), a Khazanah subsidiary. TARH holds an 80% stake in Rakan Riang Singapore, which operates Kidzania, with Boustead subsidiary Boustead Curve owning the remainder.
According to company filings, Rakan Riang Singapore has paid-up capital of S$24 million (RM82.78 million) in ordinary and preference shares. Its total assets fell from S$50 million in 2017 to S$6.578 million in 2019. By end-2019, accumulated losses stood at S$87.839 million.
TARH managing director Stephanie Saw Ai Lin sits on Rakan Riang Singapore’s board, while Wong Hee Chai was disqualified as a director on March 15, 2021. Based on the shareholder structure, Khazanah likely injected at least S$4.512 million into Rakan Riang Singapore, and Boustead at least S$1.128 million.
There are also three charges against Rakan Riang Singapore, now satisfied, with Malayan Banking Bhd listed as chargee. Khazanah probably obtained an S$25 million loan for its Kidzania Singapore investment.
This failed investment was not limited to Singapore. Sim Leisure Group acquired Kidzania Malaysia in 2020. Filings show TARH sold 24.48 million shares in Rakan Riang Malaysia to Sim Leisure Escape in 2021. The Malaysian theme park, launched by Khazanah and Boustead with RM90 million, received an RM26 million CIMB loan, repaid in 2016.
A source said Khazanah habitually pumps funds into loss-making businesses and should have leased Kidzania to operators rather than sell at a loss. “If I were the asset owner, I would get an operator to rent the asset, but Khazanah did not do so. There would be takers, allowing returns without liquidating,” the source said.
The South China Morning Post reported Kidzania Malaysia, unprofitable under Khazanah, made RM6.46 million for Sim Leisure Group in 2022. Sim Leisure Group, listed in Singapore and Malaysia, plans to revamp Kidzania Singapore for reopening in early 2024. The group, behind over 300 projects including Escape Penang and Six Flags Saudi Arabia, is one of the world’s leading theme park developers.
