HK govt proposes HK$5.4 billion bailout for Ocean Park

This picture taken on May 4, 2020 shows workers walking in the grounds of the currently closed Ocean Park, in Hong Kong. - AFP

HONG KONG (China Daily/ANN): The Hong Kong government said on Monday (May 11) that it is preparing a revised bailout plan to inject HK$5.4 billion into cash-strapped Ocean Park, amid growing concerns that the city’s iconic marine-life theme park will cease operations as early as June.

The park, which opened in southern Hong Kong Island in 1977, had already sought a HK$10.64 billion cash injection from the SAR government in January for long-term development.

The coronavirus outbreak has brought “unprecedented” operational and financial challenges soon after the plan was submitted to the Legislative Council’s Finance Committee in late February, said Secretary for Commerce and Economic Development Edward Yau Tang-wah.

“The park has since been closed for more than three and half months. During the period, it had zero visitors and reported zero income, ” Yau noted.

“We also see great difficulties ahead even when the park reopens in the future. The whole tourism landscape, both locally and globally, will be undergoing major changes, ” he added.

Leo Kung Lin-cheng, chairman of the park’s board, said it has lost about HK$700 million in the past three months, with expenditures of around HK$140 million per month and revenue losses of HK$200 million.

Yau said the new funds will serve two purposes. One is to ensure the park survives the next 12 months, while it redefines its strategic plans. The other is to help it retire HK$3 billion in commercial debt.

The government has also proposed putting off repayments of the park’s two government loans amounting to HK$3.6 billion.

Legislators will be asked to scrutinise the revised plan on Friday. Yau said it is first time Ocean Park had applied for government funding. In the past 40 years, the park had always been able to finance itself.

If the park is not able to obtain these funds before the end of June, it may shut down. This will be a fatal blow to its 40-year reputation and successful branding. It could also mean the loss of 2,000 full-time jobs, he added.

The park’s financial position had been getting worse in recent years. It has warned that its cash-flow deficit is expected to exceed HK$600 million in the 2019-20 fiscal year. It reported a deficit of HK$557.3 million for 2018-19 - doubling its deficit of HK$236.5 million for the previous year. - China Daily/Asia News Network