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PETALING JAYA – The opening of a new theme park inspired by the design of 20th Century Fox World is expected to increase the number of visitors to Genting Highlands over the next two years from June 2019.
However, this will not happen – causing a setback for Genting Malaysia Bhd in its efforts to increase the number of visitors.
Genting's shares in Malaysia were hit hard yesterday by the opening of its amusement park, under construction at Resorts World Genting, which posed a problem.
This decision was taken after Genting Malaysia reportedly filed a lawsuit against 21st Century Fox Inc. and Walt Disney Co for giving up an agreement to allow the group to build a theme park using the company's design rights and intellectual property rights. Fox Entertainment Group, LLC.
<! – The 20th Century Fox World Theme Park, valued at RMB 4.5 billion ($ 1.47 billion), was to be completed at the end of last opening was postponed until the middle of next year.
"Without the theme park, it is uncertain that the catalyst is increasing the number of visitors to Genting Highlands." This is important for Genting Malaysia as a theme park operator, said an analyst. , adding that the company should shed light on the issue by the end of the week.
In a paper filed yesterday with Bursa Malaysia, Genting Malaysia claimed more than US $ 1 billion ($ 1.37 billion) for the cost of its investments, as well as consequential and punitive damages.
Genting Malaysia shares plunged 60 Sen, or 16.7%, to close at 3 RMB, wiping 3.4 billion RMB from its market capitalization.
The counter surpassed the list of volumes with 276.3 million shares changing hands.
The impact was also felt at the level of the parent company – Genting Bhd – which saw its stock price drop 52 sen, or 7.5%, to close at 6.38 RM.
Reuters, quoting the file, said Disney wanted to end the contract because its association with a gaming company did not match its brand strategy "family friendly".
Disney won the battle to take control of much of 21st Century Fox's entertainment and media assets for $ 71.3 billion two months ago.
This included 20th Century Fox film and television studio, which owns the intellectual property rights to the theme park design.
The acquisition of 21st Century Fox by Disney is expected to close in the first quarter of 2019.
Genting stated that Fox had issued a default notice in the hope of terminating the contract, in a manner "entirely compatible with Disney wanting to terminate the transaction" to profit from it.
"Given that Fox Entertainment Group was not allowed to terminate the contract, Fox and Disney are responsible for what will exceed $ 1 billion in damages attributable to the bad faith behavior of Fox and Disney," did he declare.
The case also revealed that Genting had already made an investment of over 750 million US dollars in Fox World.
Genting Malaysia entered into a licensing agreement with Fox in 2013 for the development of what would be the world's first Fox brand amusement park.
Under the terms of the agreement, Genting Malaysia obtained a license to use certain intellectual property rights associated with Fox motion pictures for the design, development, construction and operation of the theme park as part of the tourism plan. integrated Genting.
Analysts began to take into account the delays in the opening of the theme park.
"Due to potential legal complications, we are concerned that Genting Malaysia may not be able to open the theme park in the first half of 2019," CIMB Research said in a report released yesterday.
AllianceDBS Research felt that Genting Malaysia could look for other global partners to allow characters from its theme park.
"The restructuring of the outdoor theme park could also result in additional costs due to the end of the collaboration," he added.
It should be noted that the course of action of Genting Malaysia has been under pressure since the beginning of the month after the announcement by the government of its decision to increase the tax on casinos.
The market capitalization of the wicket has been cleared of RM8 billion since the beginning of this month. Since the beginning of the year, Genting Malaysia has fallen more than 46% to 3 RM.
The decline in Genting shares weighed heavily on the performance of the local FBM KLCI benchmark yesterday.
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