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DXB Entertainments’ majority shareholder Meraas plans buyout

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DXB Entertainments’ majority shareholder Meraas is planning a buyout. Meraas already owns over half of the theme park group which operates Dubai Parks & Resorts – the offer would make it private.

Meraas Holding made a statement yesterday announcing a formal bid to buy out the debt-ridden company. The conditional offer would convert $1.6 billion of DXBE’s debt into equity, including a $403 million bond. Shareholders would be given $0.02 per share, below the closing price of $0.03 on Sunday.

“The board of DXBE is in the process of evaluating the offer,” said the statement, signed by DXBE chairman Abdul Wahab Al-Halabi, promising they would “update the market in due course.”

State-backed Meraas holds 52.3 percent of DBXE, according to data from financial technology experts Refinitiv Eikon. The Qatar Investment Authority holds 10.98 percent, while the Kuwait Investment Authority holds 5.07 percent.

Struggling finances

Last month DXBE said its accumulated losses (as of the end of September) stood at 78 percent of capital. It made a net loss of 238 million dirhams in the third quarter.  According to Reuters, the International Monetary Fund estimates the emirate’s economy could shrink by 9.8 percent this year. S&P Global Ratings predict an 11 percent contraction.

The COVID-19 pandemic has had a significant impact as Dubai relies heavily on tourism. Expo 2020 has been pushed back to October 2021.

Theme park expansion cancelled

DXBE has not posted a profit in years and plans for new theme parks have been cancelled. Last year it was unable to continue construction on Six Flags Dubai, announcing in April 2019 that plans had been shelved.

DXBE launched in 2014. It’s the Dubai-based owner of Dubai Parks and Resorts and assets span 25 million square feet of land.  Its stated aim is “to become an industry-leading provider and producer of innovative and inspirational entertainment experiences in the Middle East”, according to its website.

Meraas was founded in 2007. The Dubai-based privately held holding company has projects in many sectors, majoring in hospitality, retail, leisure and entertainment within Dubai. Its entertainment portfolio includes the Coca-Cola Arena, Laguna Waterpark, The Green Planet, Dubai Safari, Hub Zero, Hawa Hawa, Mattel Play! Town, Splash Pad, and Ain Dubai, the world’s tallest observation wheel.

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