No-go roller coaster: how Dreamworld banked on a hand-to-mouth recovery strategy they could never afford

As roller coaster parts arrive via shipping container from Germany, Dreamworld executives reveal a precarious financial position that's more than just concerning in the face of a global pandemic: the numbers simply don't stack up on their costly recovery gamble.

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Well this article is going to age well.

2 hours ago, Jpw25111 said:

Well this article is going to age well.

Which parts? Senior management quoted saying they require funding to build it? That their plan was to fund its construction with cash flow from a business that was already running at a loss? Their lack of a debt facility in Australia to draw from? 

At no point does the article suggest it won't be built; it's probable it will. If you can point to any certainty as to how or when they'll achieve that then please do.

So what this article is trying to say is that Dreamworld will stay in financial jeopardy long term after this ride is built. Years even?

1 hour ago, coasterdude44 said:

So what this article is trying to say is that Dreamworld will stay in financial jeopardy long term after this ride is built. Years even?

That was on the cards even prior to covid-19..

3 hours ago, coasterdude44 said:

So what this article is trying to say is that Dreamworld will stay in financial jeopardy long term after this ride is built. Years even?

 

More like if you're building this ride make sure you get paid upfront as you don't want to be a creditor in case they enter Voluntary Administration.

They are in the media .. perhaps to put more pressure on a state government loan ?

Is zero debt facilities correct? With cash reserves dwindling by 10 m per month ardent will be insolvent soon enough . One would expect a capital raising soon or administration . 

Hmmmmm I wonder if Movie World could buy it from them and replace Arkham Asylum...

3 minutes ago, stellaclose said:

Hmmmmm I wonder if Movie World could buy it from them and replace Arkham Asylum...

Unless they were going shuttering Up the park that wouldn’t happen.

if they went into administration Someone would Buy them on the cheap and the coaster would remain.  

12 hours ago, dbo121 said:

They are in the media .. perhaps to put more pressure on a state government loan ?

Is zero debt facilities correct? With cash reserves dwindling by 10 m per month ardent will be insolvent soon enough . One would expect a capital raising soon or administration . 

No Australian debt facilities is correct.

May 2016 revenue was only $6 million, so if the park is genuinely losing $5-10 million a month with significantly reduced costs during shutdown and the majority of wages covered by JobKeeper (there's say $1-2 million in costs) then insolvency is what they deserve, pandemic or not.

The three options to repair their balance sheet mooted by AFR and echoed by other investment reports suggests they can do three things: sale-and-leaseback (a la VRTP), sell a stake in Main Event or raise equity. 

We know with certainty that the first two have been on the cards and/or actively pursued by Ardent in recent times.

there Is about 80m cash on hand post refi as at April . They have the cash for a little while but would be running a finer line if do discretionary construction spending whilst not operating . So prudent to hold off . 

Edited June 4, 20205 yr by dbo121
Facts corrected

$80 million after the refinance in April 2019 but down to $58 million as at 31 December 2019.

Obligatory "Ooof"