Covid-19: Temporary suspension of Dubai Parks and Resorts extended
DXB Entertainments gets temporary debt relief from creditors.
DXB Entertainments on Thursday extended the temporary suspension of its theme park and also received relief from creditors.
The operator of Dubai Parks and Resorts had earlier announced suspension of its operations until March 31, 2020.
Due to the current uncertainty and potential reduction in demand for the remainder of the year, it has decided to delay the opening of the Legoland Hotel from June 2020 to Q4 2020.
Uncertainty surrounding how many people are affected from the Covid-19 coronavirus in each country had forced companies to suspend operations. But now companies are extending the suspension of their operations until the dust settles around Covid-19 and the disease has been brought under control.
During the holy month of Ramadan, which experiences low demand, DXBE said it will focus on its annual routine maintenance cycle, in readiness for re-opening.
"Consequently, Covid-19 will have a material impact on our 2020 results. However, given the high level of uncertainty, it is too early to quantify this impact. Our contingency plans have been activated and as of today, we have either implemented or are in the process of implementing further cost savings, in addition to the material savings already delivered in 2019."
Mohamed Almulla, Managing Director and CEO, DXB Entertainments, said that they have taken the decision to extend the temporary suspension of operations in support of both local and global efforts to reduce the spread of Covid-19.
"Our liquidity position is robust and I am pleased to announce has been further improved by reaching agreement with our financing partners to defer a significant proportion of our interest over the next 15 months, significantly improving our near-term liquidity. We are monitoring the situation and will provide further updates in due course," he said.
The operator is in advanced discussions with its syndicated loan financiers with regard to its Dh4.2 billion syndicated loan facility.
"These discussions have now concluded and effective from March 31, 2020, for a period of 15 months through to June 30, 2021, a significant proportion of the interest/profit due will be deferred and will be settled in cash at the end of the 15-month period," it said in a statement on Thursday.
The company is also renegotiation supplier agreements, an immediate reduction in marketing spend and a suspension of outsource arrangements to mitigate the impact of the suspension of operations.
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