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|25 April, 2019

U.S.-based Six Flags to contest Dubai park cancellation

"We will pursue all our rights and remedies under our agreements", U.S. operator says in filing

MOTIONGATE Dubai Main Gate.

MOTIONGATE Dubai Main Gate.

Dubai Parks and Resorts/handout via Thomson Reuters Zawya

U.S.-based theme parks operator Six Flags Entertainment Corporation has said that it will "pursue all our rights and remedies" under its agreement with Dubai-based DXB Entertainments after being formally notified that contracts for a Six Flags Dubai park had been terminated.

In a statement accompanying its quarterly results on Wednesday, Six Flags Entertainment Corporation said that "our partner in Dubai sent us notice purporting to terminate our various contracts with them" on Wednesday.

"We believe that they have no basis to do so and we will pursue all our rights and remedies under our agreements."

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On Thursday morning, DXB Entertainments issued a statment reporting that shareholders at its annual general meeting on Wednesday had approved plans to upgrade the existing Motiongate Dubai and Bollywood Parks Dubai assets "through the reutilisation of rights issue assets and proceeds originally intended for the Six Flags Dubai project".

"Consequently, the Six Flags Dubai project is no longer proceeding," the statement added.

DXB Entertainments had raised 1.68 billion dirhams from shareholders in May 2016 to build the Six Flags Dubai resort as the second phase of Dubai Parks and Resorts, but anticipated numbers at the existing parks have been considerably lower than forecasts since park openings began in late 2016.

The company announced a strategic review in August 2018, which included its plans for Six Flags Dubai.

Following this, the company said in February that funders’ concerns, "specifically in relation to the revised projections" for the project and a formal notification from Six Flags meant a syndicated loan of around one billion dirhams for the project was no longer available.

Six Flags Entertainment Corporation was not immediately available for comment. A spokesperson for DXB Entertainments said that “due to legal constraints we are unable to discuss the specifics of our interactions with Six Flags”.

“However, we can confirm that we have met all our obligations under our contractual relationships with Six Flags,” the spokesperson added.

(Reporting by Michael Fahy; Editing by Mily Chakrabarty)

(michael.fahy@refinitiv.com)

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