Bailout group predicts a tough slog for theme park

The Turnaround Management Association of Taiwan (台灣重建協會) said yesterday that it faces a bumpy road in assisting underperforming Yamay International Development Corp (月眉開發) -- which runs the Mala Bay (馬拉灣) theme park in Taichung County -- with development of a plan to revive the nation's biggest recreation facility.

"We have encountered some resistance from the facility's owner, who believes that other investors are interested in making investments in the park," said Sherry Lin (林秀玲), who chairs the association's enterprise evaluation committee.

In early January the association and Yamay inked an agreement wherein Yamay sought professional management expertise from the association. The association dispatched a five-member team to work out a turnaround plan for the facility.

The facility's major shareholders and creditors -- such as the state-run Taiwan Sugar Co (Taisugar, 台糖) and banks participating in syndicated loans -- had previously been reluctant to take part in any turnaround plan due to conflicts of interests, Lin said.

Lin said that since the association stepped in, her committee has convinced all parties to review the association's draft turnaround plan, which is slated to finalized by April 10 and which proposes recapitalization.

"Until the facility's size of capital is reduced, new investors will not be interested in injecting new capital," Lin said.

Lin also said that the association is confident of being able to propose a feasible plan to revive the park and to satisfy the park's owner and its creditors.

Yamay opened the Mala Bay theme park in July 2000.

The nation's economic downturn over the last three years has contributed to the park's financial difficulties.

Since January last year, Yamay has been in default on a NT$6.9 billion (US$208 million) syndicated loan that involves 21 banks, including the First Commercial Bank (第一銀行) and Chang Hwa Commercial Bank (彰化銀行).

Chang Hwa has threatened to foreclose on the loan because Yamay has failed to propose a satisfactory repayment plan.

Yamay also owes NT$290 million in royalties and rent to Taisugar.

Lin said that five or six other enterprises have approached the association for help, including Pacific Electric Wire & Cable Co (太電), whose US subsidiary has run into financial difficulties, and the printed circuit-board maker Unicap Electronics Industrial Corp (耀文電子).

The association's chairman, Lee Yung-san (李庸三), said that Pacific Sogo Department Store (太平洋崇光百貨) may be a good target for turnaround management because the problems with the well-performing department store lie in its parent company's using the department store as collateral for other re-investment subsidiaries.