MBK Wraps Up China Theme Park Purchases Worth $950 Million

A fund affiliated with MBK Partners, a Seoul-based private investment firm cofounded by Korean-American billionaire Michael Kim, has wrapped up the purchase of four theme parks from China’s Huachang Ocean Park Holdings for 6.08 billion yuan, or approximately $950 million, including assumed debt, according to a Hong Kong Stock Exchange filing on Thursday evening.

“Since the outbreak of Covid-19 in early 2020, the company has been suffering from high debt levels and increasing losses,” Huachang said in a statement last month. Selling off the assets will generate cash to reduce debt and sustain remaining operations, it said. The planned MBK purchase was first announced in October.

High debt, slower economic growth, and oversupply have pressured some of China’s largest real estate developers to sell assets to raise cash this year.  China Evergrande Group, controlled by billionaire Hui Ka Yan, has become a poster child for the industry’s problems with some $300 billion of debt.  However, other billionaire-controlled developers such as Hui Wing Mao’s Shimao Group and Zhang Li’s Guangzhou R&F Properties have suffered large stock losses.

Founded in 2005, MBK is one of Asia’s largest private equity businesses with $25 billion of assets under management. Kim, an American citizen worth $6.7 billion on the Forbes Billionaires List today, was born in South Korea and educated in the U.S. from preparatory school onward.  Forbes Asia listed Kim as a member of its 2021 Heroes of Philanthropy List this month.

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

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The four existing parks sold by Haichang are located in Wuhan, Chengdu, Tianjin and Qingdao and have been in operation 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 president, had resigned “due to his personal commitment.”

MBK and Haichang have entered into the “strategic cooperation agreement” to promote the “Haichang” brand, develop intellectual properties and biological technology, and expand the theme park business, Haichang said in November.

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