SIM Leisure Group URR 's unit Sim Leisure Cameron has inked an agreement for the project management of the construction as well as the operation and maintenance of an environmentally sustainable theme park in Cameron Highlands, Malaysia.
The Catalist-listed company said it will jointly develop the theme park with the project owner Hektar Muda Assets, and also operate, manage and maintain the theme park on behalf of the owner for 30 years, with an option to mutually extend such services by 10 years.
Hektar Muda, a Malaysia incorporated company mainly engaged in property development, oil palm cultivation and sub-division of marketable plantation plots for sales, owns Hektar Muda Assets and the land to be used for the theme park development.
In its regulatory statement to the Singapore Exchange on Friday, Sim Leisure said the theme park is expected to open one-and-a-half years after construction works begin.
If its opening fails to take place as scheduled solely due to Sim Leisure's fault, Hektar Muda Assets is entitled to liquidated damages of RM1,000 (S$322.60) per day of delay, capped at RM180,000.
The cost of constructing the theme park will be funded by Hektar Muda Assets but if it exceeds RM15 million, Sim Leisure will need to finance the cost that exceeds this amount by way of capital injection into Hektar Muda Assets.
Through collaborating with Hektar Muda, the theme park operator said it is able to boost its top line without straining its balance sheet, elevate its status as the "leading" developer and operator of retro-eco theme parks in Malaysia, and expand the Escape brand of theme parks.
Also, it will charge fees for the management of the project as well as for the design and coordination of the detailed/architectural design of the theme park.
Sim Leisure will, however, need to make payments at an agreed percentage to Hektar Muda Assets for running the theme park as well as be responsible for the operating expenses.
The deal is conditional upon several conditions being fulfilled within six months from the date of the agreement.
The counter ended unchanged at S$0.199 on Friday, before the filing was made to the bourse.