Tuesday, April 13, 2021

SeaWorld terminates agreements with Zhonghong Holding for China-based parks and attractions

Zhonghong’s license and design agreements for Chinese-based SeaWorld parks and entertainment centers was terminated April 2019 for lack of payment.

In the proxy for its Annual Shareholder Meeting, SeaWorld reports:

“In connection with the Sale, Sea Holdings I, LLC, a wholly-owned subsidiary of the Company, and Zhonghong Holding Co., Ltd. (“Zhonghong Holding”), an affiliate of ZHG Group, entered into a Park Exclusivity and Concept Design Agreement (the “ECDA”) and a Center Concept and Preliminary Design Agreement (the “CDSA” and(collectively with the ECDA, the “ZHG Agreements”). Under the terms of the ECDA, the Company was to work with Zhonghong Holding and a top theme park design company, the Hettema Group, to create and produce the concept designs and development analysis for theme parks, water parks and interactive parks in China. Under the terms of the CDSA, the Company was to provide guidance, input, and expertise relating to the initial strategic planning, concept and preliminary design of Zhonghong Holding’s family entertainment and other similar centers. In exchange for providing services under the ZHG Agreements, the Company recorded revenue of approximately $5.1 million in 2018. As of December 31, 2018, a receivable related to the ZHG Agreements of approximately $1.5 million was recorded on the Company’s consolidated balance sheet. In April 2019, the Company terminated the ZHG Agreements for non-payment of undisputed amounts owed under the Agreements. The Company expects to record approximately $1.7 million in revenue during the first quarter of 2019, which relates to non-refundable amounts which were received from ZHG prior to the termination under the terms of the ZHG Agreements.”

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