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No walk in the park for SuperPark creditors, staff

No walk in the park for SuperPark creditors, staff

Source: Business Times
Article Date: 29 Sep 2020
Author: Lynette Tan

Indoor park operator's Asia group is under interim judicial management, with employees and creditors left in limbo.

The signs on the doors of SuperPark Singapore, an indoor playground at Suntec City that has been closed since the circuit breaker in April, and its social media pages suggest it will reopen soon. But behind its closed doors, legal and financial woes have ensued, while creditors and employees have been left in the lurch.

SuperPark Singapore and its counterparts in Hong Kong, Bangkok and Kuala Lumpur are subsidiaries of holding company SuperPark Asia Group, which is now under interim judicial management. The latter has S$18 million in liabilities, based on documents provided by creditors and seen by The Business Times. SuperPark Asia's Finnish parent SuperPark Oy was to have provided some financial support, but it fell short.

SuperPark Asia brought the Finnish brand of indoor activity parks to Asia in 2017, starting with Hong Kong. It opened outlets in Singapore and Kuala Lumpur in 2018, and in Bangkok last November.

Among the group's numerous creditors in the region is APM Property Management, which manages Suntec City. Cash flow statements submitted to the court in Singapore showed that as of May 26, SuperPark Singapore had not paid at least S$500,000 in rent to APM. If estimated rents for June and July are included, SuperPark Singapore could owe APM about S$900,000.

The park at Suntec City occupies a 37,000-square feet space formerly used by supermarket Carrefour.

When BT queried APM in August, the landlord said it was working with the park operator to resume operations at the mall. When approached again last week, APM said: "We are working with the park operator to resume their operations in Suntec City safely, in compliance with all safe distancing measures. As commercial information between landlord and tenant is strictly confidential, we are unable to comment further."

Other indoor playgrounds in Singapore reopened in July in line with eased government regulations.

Meanwhile, a local signage-related company is owed more than S$200,000 for work done at the end of last year. SuperPark Asia had told the signage company it was facing "internal issues".

Cebu Air Travel & Tours, a Singapore-based wholesaler for attraction tickets, is seeking a refund of some S$30,000 it spent purchasing about 1,000 tickets from SuperPark Singapore. Customers who have not been able to use the tickets since the park closed have also started asking for refunds from Cebu Air Travel, which said: "During the pandemic, sales are at an all-time low. Every ticket counts for us and if SuperPark Singapore or attractions do not refund for the pre-purchased and unused tickets, many travel agencies will incur significant financial losses."

The cash flow statements also showed about S$574,000 in deferred 2019 bonuses and salaries for February to May due to employees in Singapore. It is understood that staff started taking pay cuts around February; some were also let go to cut costs.

Most employees in Singapore and regionally have since left, said Edwin Tiah, managing director at recruitment firm Elitez, which had helped to recruit at least 100 people across the region for SuperPark Asia. Elitez is owed some S$20,000 for its services.

"As a small business, we hope we can recover (the sum), but there's not much of an option for us. More importantly, we hope employees can get help," said Mr Tiah. He added that the employer could have taken more initiative, such as by locating job opportunities in other industries for staff.

In Kuala Lumpur, SuperPark Asia has been asked by its landlord to vacate its premises by Oct 17 and pay about 3.2 million ringgit (S$1.06 million) in rent arrears.

In Bangkok, its park closed "for facility maintenance" on Friday after its landlord served a final letter of demand for about 5.5 million baht (S$240,000) in arrears and late payment penalties. The letter informed SuperPark Asia that services provided in the leased premises would be suspended if payment was not made.

The Hong Kong outlet has been closed from July 15 "till further notice", according to its social media pages.

Sources said SuperPark Asia's problems began when promised funding from SuperPark Oy to support the Asia group's expansion in the region fell short.

Johan Wentzel, SuperPark Oy's board chairman, noted in an affidavit that SuperPark Oy and its holding company, SuperPark Bidco Oy, had injected more than US$11.5 million into the Asia group since 2017. However, about half of that was actually bridging loans with interest to SuperPark Asia.

Also, SuperPark Bidco Oy provided 800,000 euros (S$1.28 million) - of the overall sum - in a bridging loan in March this year, to finance SuperPark Thailand. But a former senior employee told BT that each park requires about US$5 million to set up.

Ex-Asia CEO Mark Kumarasinhe said in an affidavit and showed e-mail correspondence that he had begun warning the Finnish parent's key executives - including the global CEO - since March last year, of the Asia group's "cash shortages, lack of liquidity and the risks and dangers of trading whilst insolvent", but was apparently disregarded.

The e-mail correspondence further showed the global CEO, Juha Tanskanen, seeking 1.5 million euros in repayment to himself and SuperPark Oy last July. That's even as SuperPark Asia and SuperPark Singapore's auditors requested a letter of support from SuperPark Oy due to uncertainty over whether the entities were going concerns.

The Asia group hit a liquidity crunch earlier this year when its parks were unable to operate amid coronavirus-related lockdowns. Its directors decided on a voluntary winding up in June, with an aim to sell the group's shares in the subsidiaries to raise money.

AJ Capital was appointed provisional liquidators in June and then liquidators in July, following a creditors' meeting and an extraordinary general meeting (EGM). According to its affidavit last month, AJ Capital had engaged with 19 interested parties for the sale, including family offices and private equity funds. Of those, 12 gave non-disclosure agreements.

But this hit a snag when SuperPark Oy later argued in court that it, being a majority shareholder of the Asia group, did not approve of the liquidation at the EGM.

Among other things, SuperPark Oy also expressed - in Mr Wentzel's affidavit - that the extent of the Asia group's insolvency was "not clear" given "dramatic shifts" in what are represented to be the company's liabilities. For example, it noted that current liabilities in SuperPark Asia's balance sheet as at April 30 were 325,673 euros. The Finnish group thus expressed that it was imperative for a judicial manager to take stock of the situation. It added that it is prepared to look into additional bridge funding of 2-3 million euros and to restructure all related company liabilities.

SuperPark Oy's application to place SuperPark Asia under interim judicial management was granted by the court on Aug 21.

Creditors and ex-employees said they have not been told how the Asia group will be rehabilitated, or how they may be repaid. But one said: "If everyone was aware of the issues months ago and did nothing, why would the circumstances be better now when there's Covid-19 and no management?"

Both SuperPark Oy and SuperPark Bidco Oy recorded net losses in the last two years.

Finally, annual passes bought by customers form "a pretty significant part" of the business across all parks, the ex-senior employee told BT.

The Finnish group did not reply to BT's queries, such as what would happen to the passes if any of the parks in Asia close permanently, how it plans to rehabilitate the Asia group and repay creditors and employees.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

 

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