The Ardent Leisure Group Ltd (ASX: ALG) share price is on watch today after the theme park operator announced it had received financial assistance from the Queensland Government. The company's Theme Parks division has received support under the Queensland Government's COVID-19 Industry Support Package and Queensland Tourism Icons Program. What will these mean for the Ardent Leisure share price?
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What does Ardent Leisure do?
Ardent Leisure owns and operates leisure assets in Australia and the United States. It is behind the Dreamworld and Whitewater World theme parks and the Skypoint attraction in Queensland. It also operates Main Event, a portfolio of family entertainment assets in the US. Many of these assets were temporarily closed with the onset of the coronavirus pandemic.
What type of support is Ardent Leisure receiving?
The Queensland Government has granted Ardent Leisure a financial assistance package totalling $69.9 million over three years. This consists of a secured loan of $66.9 million (including capitalised interest and fees) and a grant of $3 million which can be used to fund working capital and approved capital expenditure.
Ardent Chairman, Gary Weiss, said, "The Queensland Government's foresight in providing this financial assistance package will enable Ardent to reopen its iconic theme parks, continue to employ hundreds of people and, once the COVID-19 pandemic is behind us, continue to invest in future tourism infrastructure and create more local jobs."
Reopening of Ardent Leisure's assets
Ardent Leisure reopened its Skypoint observation deck and climb last month. Now that financial assistance for the Theme Parks division has been secured, the company plans to reopen Dreamworld and Whitewater World by mid-September. Under COVID Safe plans approved by Queensland Health, Dreamworld and Whitewater World will each reopen at 50% of historical capacity.
Main Event sale
In June, Ardent Leisure sold a 24.2% interest in the Main Event business to a private US investment firm, Redbird. Redbird has the option to acquire an additional 26.8% interest in the business at a future date. The sale will enhance the Main Event business' liquidity as well as its capacity to invest in future growth.
About the Ardent Leisure share price?
The company is due to release its full year results on 27 August which will reveal the impact of park closures. But while travel restrictions remain in place, visitor numbers to Ardent's attractions are likely to remain low. The Ardent Leisure share price has recovered 200% from its March low of 11 cents but is still down more than 75% in year-to-date trading. The Ardent leisure share price has fallen just over 72% in the past twelve months.
