SINGAPORE - Tourism company Straco Corp is buying the troubled Singapore Flyer for $140 million, more than a year after the attraction hit financial trouble.
The price is a steep discount to the $240 million outlaid by the original owners to build the Flyer, which opened for business in 2008.
Straco, which was tipped as the wheel's new owner earlier this week, is behind several well-known tourist attractions in China, including the Shanghai Ocean Aquarium and Underwater World Xiamen.
'The Singapore Flyer is a defining Singapore attraction and represents an exciting opportunity to expand our presence in the region and contribute to the Singapore tourism industry,' said Straco founder and executive chairman Wu Hsioh Kwang in a statement yesterday.
The deal announced yesterday could leave nightclub Zouk high and dry as it had been considering relocating to a space at the Flyer.
Its fate now rests with Straco, which will outline its plans for the attraction later in the year.
The Flyer, which is at the fringe of the Central Business District, hit the spotlight in May last year when the company behind the six-year-old attraction was placed in receivership.
This means that after the company could not repay loans to its creditors, the creditors appointed a receiver to settle the loans by taking control of some or all of the company's assets.
The receivers put the Flyer up for sale, with advertisements placed in publications in the United States and other countries.
Mr Tim Reid, one of the Flyer's receivers, told The Straits Times yesterday that interest from potential buyers had been 'overwhelming... significantly more parties attempted to register after the cut-off date (in June last year), even up till last week'.
The receivers shortlisted five out of the 'very large' number of potential buyers and Straco emerged as the clear choice in March this year, he said.
Straco is buying the Flyer via its subsidiary Straco Leisure. The purchase includes both the giant observation wheel and the lease of the property at 30, Raffles Avenue.
The Singapore Tourism Board (STB), which owns the land the Flyer sits on, said in a statement yesterday that it would work with the Flyer's new owner on its plans for the tourist attraction.
'We believe Straco Leisure will be able to enhance the Flyer's appeal to both local and international visitors,' STB chief Lionel Yeo said.
Mr Wu said Straco would share its plans for the Flyer by the end of this year, after it officially takes over in two to three months.
Local travel agencies noted that the Flyer has kept a low profile over the past year and may therefore have to work harder to draw visitors.
'Its success will depend on how it is packaged and how aggressively the new owner markets it,' said Chan Brothers Travel's head of marketing and communications at travel agency Chan Brothers Travel, Ms Jane Chang.
Whether Zouk will end up as a Flyer tenant also remains up in the air. Zouk founder Lincoln Cheng had said last week that he would be willing to spend $20 million to $30 million to build a new site for Zouk at the Flyer.
However, Mr Reid said yesterday that the receivers turned down Mr Cheng's proposal.
'After hearing him out, we decided that it was not in the best commercial interests of the Flyer in receivership to pursue his expression of interest.
'The receivers will leave it to the new owner to decide whether Zouk fits the concept that they have for the Flyer.'
Zouk may still stand a chance. Mr Wu told The Straits Times: 'As we are still fine-tuning the plans for the Flyer, we are open to discussions, including Zouk.'
Straco Leisure is a 90:10 joint venture between Straco and private transport company Woodlands Transport Service (WTS).
WTS has a tour group arm called WTS Travel, which operates a check-in counter at the Flyer, according to its website. WTS did not respond to queries by press time yesterday.
Straco shares have surged from as low as 26 cents in January last year to close at 82 cents on Wednesday.
Trading in the counter was halted on Wednesday night and resumes this morning.
melissat@sph.com.sg
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