Ardent Leisure (ASX: ALG) has announced the completion of a US$225 million loan facility which it will use to revive its theme parks division, including Dreamworld and WhiteWater World, and grow its presence in the US.
The combined facility is made up of a US$125 million drawn term loan, a US$75 million delayed draw term loan and a US$25 million revolving credit facility.
Ardent says the facility will be used to "return the theme parks operations to profitability" develop new centres for its US subsidiary Main Event.
All proceeds of the drawn term loan will be used to repay Ardent's existing Australian bank debt facility.
The balance will be invested in theme parks and Main Event, and after Ardent refinances and repays this bank facility it expects to have in excess of $80 million cash, plus US$100 million in undrawn facilities for Main Events to access.
The company's theme parks division has been plagued by poor financial performance since the 2016 Dreamworld tragedy.
Main Event on the other hand has been a steady performer, at FY18 accounting for 80 per cent of Ardent's pro-forma revenue.
Ardent says Main Event has reaped the rewards from consistent expansion during the last year.
"Over the past 12 months, the management team of Main Event has made significant progress, with recent new centre openings generating strong results and return on investment," says the company.
"The funds available to Main Event under the facility will be utilised to accelerate the development of new Main Event centres, with a target of approximately 5 to 8 new centres per year."
At the time of writing (12:20pm AEST) ALG shares are trading up 3.77 per cent at $1.16.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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