Recently, Six Flags Entertainment Corporation
Six Flags now expects that it won't see any revenue from the projects in China and will have to make a negative $1 million revenue adjustment.
"The Company's partner in China, Riverside Investment Group ("Riverside"), continues to face severe challenges due to the macroeconomic environment and the declining real estate market in China. This has led Riverside to default on its payment obligations to the Company and, as such, the Company has delivered formal notices of default under its agreements. While the Company continues to work with Riverside and each of Riverside's governmental partners, the eventual outcome is unknown and could range from the continuation of one or more projects to the termination of all the Six Flags-branded projects in China," the statement noted.
In spring 2018, Six Flags and Riverside announced Six Flags Kids World for Nanjing, after announcing three new branded parks to be built in Nanjing, the capital of Jiangsu province.
The theme park company planned to open two Chinese parks in Haiyan and Chongqing by July 2018. On its website, Six Flags touts that the new parks will feature record-breaking attractions that have yet to be announced.
Six Flags' struggling operations in China weren't the only troubling news in the filing, however, which also noted that the company expects to report fourth-quarter revenue of $8 million to $10 million less than the prior year. The company cited lower park attendance, season pass and membership sales.
There has been a theme park boom in China in recent years, with hundreds springing up around the country. However, in April 2018 China's powerful central planning body, the National Development and Reform Commission, urged restraint and warned that local debt risks were emerging. This could be the underlying reason why Six Flags is having trouble in China.
