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BTS: Renong Revives Plan For US$2.2b Johor Theme Park
By Eddie Toh

15/8/2001 9:53 pm Wed news/story/0,2276,17931,00.html?

August 15, 2001

Renong revives plan for US$2.2b Johor theme park

But bankers sceptical project will become reality

By Eddie Toh
In Kuala Lumpur

DEBT-LADEN Renong Bhd has revived its ambitious plan to build a US$2.2 billion (S$3.9 billion) theme park in Johor with Hollywood's Universal Studios - but bankers remain sceptical that the massive project will ever take off.

As part of a major revamp, the Malaysian government, through Syarikat Danasaham, has offered RM4.50 per share to take Renong associate UEM private so that it can restructure the Renong-UEM group's massive debts of RM20 billion (S$9.3 billion).

This, said bankers, makes the project very uncertain as the government's rescue plan was not part of Renong's original game plan.

Renong yesterday confirmed that Universal Studios is doing a feasibility study on the proposed project but added that the study is still in its preliminary stage.

To be sited on part of the 9,600-hectare tract of land at Nusajaya near the Second Link connecting Malaysia and Singapore, the project clearly targets Singaporeans and foreigners using Singapore as a stopover or regional hub. The land is partly owned by Prolink Development, which is majority controlled by Renong, with the rest owned by the Johor state government.

Danasaham officials have not discounted the possibility that it would wrest control of Renong from beleaguered tycoon Halim Saad as well.

'Control of Renong and the Prolink land will depend on Halim's put option,' said a senior banker. Mr Halim, who owns 16 per cent of Renong, had promised to buy 31 per cent of Renong from UEM. But he has had difficulties in coughing up over RM3 billion to fulfil the obligation.

According to an Asian Wall Street Journal report yesterday, the proposed project will be developed over 15 years and will be Universal Studios' sixth theme park. This is the second time Renong is trying to breathe life into the plan. Universal Studios - the group behind movies such as ET, Terminator, Backdraft and Jaws - recently opened Universal Studios Japan in conjunction with the city of Osaka.

Meanwhile, the development of another Hollywood-style movie studio in Malaysia has also hit a snag.

The Sun recently reported that work on the RM3 billion E-Village at the former tin-mining area at Dengkil in Selangor has almost come to a standstill. 'Since the grand opening ceremony attended by the prime minister and Hong Kong action hero Jackie Chan last September, little else has happened on the sprawling 800-ha project site,' it said. Tycoon Syed Mokhtar Al-Bukhary is said to be keen to take over the project from the government but will scale it down. The businessman is also linked to Port of Tanjung Pelepas in Johor.

Apart from financial constraints, the report said the E-Village project could stall due to the small domestic entertainment industry and stiff competition from other Asian countries.

This is not the first time that Johor wants to house a mega theme park to capitalise on its proximity to Singapore. Over a decade ago, a RM3.4 billion plan to transform Desaru on the east coast of Johor into a playground for the rich came to a standstill due to a squabble among its shareholders.

Tuesday August 14, 8:29 PM

UPDATE 1-Universal Studios may build Malaysia park

(Recasts, updates with Renong, govt comments)

KUALA LUMPUR, Aug 14 (Reuters) - Entertainment group Universal Studios Inc is studying the feasibility of developing a theme park in Malaysia, Malaysian conglomerate Renong Bhd said on Tuesday.

Just one day after the government said it would support large tourism projects, Renong said in a stock exchange statement that a family-oriented theme park resort was under consideration.

The Asian Wall Street Journal said on Tuesday that Renong and Universal Studios would jointly develop a $800 million theme park in Johor, which borders Singapore and where Renong is developing a large piece of land.

The AWSJ cited unnamed consultants familiar with the plan as saying the companies recently signed a letter of intent expected to pave the way for a detailed agreement.

The news came a day after a government minister said Malaysia was seeking to embark on mega-tourism projects to lure more foreign tourists into the country.

"We are planning and will hold discussion with a few local and foreign companies to set up theme parks, something similar to Universal Studios and Sea World," Tourism Minister Kadir Sheikh Fadzir said.

Tourism is already one of Malaysia's main foreign exchange earners. For the first six months of this year, tourist arrivals rose by 44 percent to 7.24 million. The number for the whole of this year could exceed a record 10.2 million people, Kadir said.

Renong said its 65-percent owned subsidiary Prolink Development Sdn Bhd was exploring various projects as part of the development of a township called Bandar Nusajaya in Johor.

The AWSJ said the park will be modelled after Universal's Port Aventura theme park in Spain and will be the centrepiece of a $2.2 billion, 800-hectare (1,980 acre) development project which includes a convention hall, a golf course and hotels.

Construction of the theme park, which is expected to draw close to four million visitors a year, is scheduled to begin next year and is targeted for completion in 2004.

The paper said Universal, the movie wing of French media giant Vivendi Universal, would operate the theme park with no equity involvement.

Universal has two theme parks in Asia -- one in China and one in Japan.

The Malaysian government last month launched a $1.0 billion takeover bid for Renong's affiliate United Engineers (UEM).

If successful, the government would wrest control of the conglomerate from prominent businessman Halim Saad because UEM owns about 31 percent of Renong.

Renong shares closed up 10 cents at 84 cents.