KidZania Singapore owes S$53m to over 1,000 creditors

Singapore

KHAZANAH-BACKED family attraction KidZania Singapore, now under liquidation, owes S$53.4 million to more than 1,000 parties including businesses and government agencies in Singapore, The Business Times (BT) has learnt.

About S$50 million of that sum is listed as claims by Themed Attractions Resorts & Hotels (TARH) - the leisure and tourism arm of Malaysian sovereign fund Khazanah Nasional - which owns an 80 per cent stake in Rakan Riang, the joint venture company behind KidZania Singapore.

Boustead Curve, a wholly-owned subsidiary of property developer Boustead Holdings, holds the remaining 20 per cent stake in Rakan Riang. The rest of the debts are owed to customers, businesses and government agencies in Singapore, including the Singapore Tourism Board (STB), the Sentosa Development Corporation (SDC) and the Ministry of Education (MOE), according to a list of creditors seen by BT.

SDC, owed S$207,400 in rent for KidZania's premises on Sentosa Island, would only say it was "in touch with the liquidators".

STB, owed S$27,400, said it was unable to share details due to "business confidentiality". Asked if STB and its fellow statutory board SDC have been informed of how KidZania will raise funds to pay creditors, it said that it "does not engage private tourism establishments to discuss their debt repayment plans to other creditors".

Meanwhile, MOE's sports and recreation club is understood to be owed S$62,300 for corporate passes purchased from KidZania.

But financial records show the business has made losses in the four years it has operated here; updates from a creditors' meeting last month also show that the company may only be able to realise S$4.4 million in assets, meaning limited restitution for creditors.

When KidZania opened in Singapore in 2016, it recorded S$15 million in revenue and a loss after tax of S$8.3 million that year. Since then, its revenues have hovered around that figure, while losses have widened. Last year, KidZania generated S$14.4 million in revenue but made a loss after tax of S$28 million.

The total value of its assets has also diminished, from S$48.9 million in 2016 to S$5.9 million as at Aug 24, according to the statement of affairs presented at the creditors' meeting.

Fuelling some creditors' frustration is what they see as a lack of clarity in the process towards recouping their money, which they were told could take one and a half to two years at best.

Singapore-based attraction tickets wholesaler Cebu Air Travel & Tours, which is owed S$177,100, thinks Rakan Riang has been stalling. The company had followed up with Rakan Riang for payment after news of its exit emerged, and the latter's management had assured Cebu Air Travel that it would be paid.

"Because they are wholly owned by Khazanah, we believed we would get the money back," the company said. It was later told that administrative and refund matters had been handed over to Rakan Riang's team in Malaysia, which was unable to travel to Singapore to meet creditors due to border closures.

Cebu Air Travel later received notice of the creditors meeting on Sept 4. Updates from that meeting were the last it heard from Rakan Riang and its liquidators. The company later also wrote to Singapore authorities, which apparently expressed that they may not be able to help as Rakan Riang is already being liquidated.

Peter Lim, managing director of youth development training company High Achievers, said the firm repeatedly sought to speak to Rakan Riang's management in Malaysia after news of KidZania Singapore's closure, but received no word, except to go through the liquidators.

The firm had invested about S$300,000 to build an indoor campsite within KidZania's Sentosa premises and signed an agreement to develop and market programmes together. "When we heard of the 'circuit breaker' in April and that KidZania would have to close, we were not given any sign whatsoever that they intended to close down. In fact, they were pushing us to do marketing and up to the day before the circuit breaker, we were still doing the fitting out," said Mr Lim.

He wants to know how the firm can get its assets and money back. A bank loan taken out to fund the investment, and the Covid-19 pandemic has forced High Achievers to go dormant. "It's a huge investment for small and medium-sized enterprises like us. To us, working with KidZania was almost like working with the Temasek of Malaysia," Mr Lim added.

Some businesses also approached the Association of Singapore Attractions for help. "Frankly, as an association there's little we can do," said chairman Dr Kevin Cheong.

But he questioned: "They (TARH) have the right to liquidate Rakan Riang, but from an ethical standpoint, is it right for a sovereign wealth fund to be doing this in another country? Should a foreign wealth fund be able, or allowed, to walk away from their financial obligations in such a fashion?"

The Consumers Association of Singapore said it received five complaints against KidZania since July 1.

Khazanah declined comment when approached by BT.

Meanwhile, KidZania Kuala Lumpur signed a partnership with online travel agent Klook last month, despite reports that Khazanah was mulling over shutting it down.

Klook, however, is owed S$47,700 by KidZania Singapore. The firm declined to comment.