Facing intensified competition in the area, Ocean Park has experienced a decline in admissions in recent years, and its financial situation has gradually deteriorated
For the 2018/19 results as of the end of June last year, the cash on hand decreased by 40% year-on-year to 1.085 billion yuan. As a result of the expansion project in the early years, the total loan amount reached 5.298 billion yuan, of which 1.62 billion yuan was in Repayment due within the next two years.
Of the above-mentioned 5.298 billion yuan loans, 3.678 billion yuan were government loans and the remaining 1.62 billion yuan were commercial loans; 200 million yuan were due to be repaid within one year, and another 1.42 billion yuan had a repayment period of more than one year, but not More than two years.
Interest on long-term government loans
Ocean Park was built by the government free of charge and donated by the Hong Kong Jockey Club. By 1987, the government had been independent of the Jockey Club and became a statutory non-profit organization according to the Ocean Park Corporation Ordinance. Seeking capital injection, even if the park has carried out two large-scale expansions in 2005 and 2013, they have only been supported by the government’s long-term loans and are required to pay interest.
For example, in 2005, the expansion and renovation plan promoted by Sheng Zhiwen, then chairman of Ocean Park, doubled the number of attractions and mobile games.
The total cost was about 5.55 billion yuan. The government only provided a 25-year loan of 1.387 billion yuan at a fixed interest rate of 5%.
The remaining funds must be paid from Ocean Park to the bank
By 2013, the Legislative Council approved the government to lend another 2.29 billion yuan to Ocean Park for a period of 20 years to support the reconstruction of the Dashuwan Water Park. However, the project was delayed and overinvested, and the cost is expected to increase to 3.6 billion yuan.