MBK Closes $ 950 Million Theme Park Purchase In China

A fund affiliated with MBK Partners, a Seoul-based private investment firm co-founded by Korean-American billionaire Michael Kim, has completed the purchase of four theme parks from Chinese company Haichang Ocean Park Holdings for 6.08 billion yuan, or about $ 950 million, including suspected debt, according to a document filed on the Hong Kong Stock Exchange on Thursday evening.

“Since the Covid-19 outbreak in early 2020, the company has suffered from high debt levels and increasing losses,” Haichang said in a statement last month. The sale of the assets will generate cash to reduce debt and support the remaining operations, he said. The planned purchase of MBK was first announced in October.

High debt, slower economic growth and oversupply have prompted some of China’s biggest real estate developers to sell assets to raise funds this year. The China Evergrande group, controlled by billionaire Hui Ka Yan, has become an illustration of the industry’s problems with some $ 300 billion in debt. However, other billionaire-controlled developers such as Hui Wing Mao’s Shimao Group and Zhang Li’s Guangzhou R&F Properties suffered significant inventory losses.

Founded in 2005, MBK is one of Asia’s largest private equity firms with $ 25 billion in assets under management. Kim, a $ 6.7 billion U.S. citizen on Forbes Today’s Billionaire List, was born in South Korea and educated in the United States from prep school. Forbes Asia listed Kim as a member of its 2021 Philanthropy Heroes List this month.

Haichang, whose shares rebounded from a low of HK $ 0.53 in July to HK $ 2.72 on Thursday, will continue to own theme parks in five cities, including Shanghai and Sanya. Its main shareholder is Qu Cheng, the son of the founder of the Haichang group, Qu Naijie, who owns about 45% of the company. Haichang’s market capitalization on Thursday was HK $ 10.88 billion, or about $ 1.4 billion.

The four existing parks sold by Haichang are located in Wuhan, Chengdu, Tianjin and Qingdao and have been operational for more than 10 years. China’s theme park industry has faced increasing competition over the years: Universal opened a park in Beijing in September; Disneyland opened in Shanghai in 2016.

Haichang also announced yesterday that Gao Jie, its executive chairman, had resigned “because of his personal commitment.”

MBK and Haichang have entered into a “strategic cooperation agreement” to promote the “Haichang” brand, develop intellectual properties and biological technology, and expand the business of theme parks, Haichang said in November. Earlier this year, MBK acquired 100% of China’s car rental company CAR in a $ 1.1 billion privatization.

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