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Singapore Flyer operator runs into financial trouble
Publication Date : 29-05-2013
The company behind the giant ferris wheel Singapore Flyer has been placed under receivership by its main lender, just five years after it opened.
The Straits Times understands that the main lender is a bank which has taken action because it is owed money by the wheel's operator, Singapore Flyer Pte Ltd.
Partner Tim Reid of the appointed recovery firm Ferrier Hodgson said he was confident that the receivers would be able to "identify investors with the vision to manage, diversify and enhance the Singapore Flyer, thereby securing its long-term future as a significant Singapore attraction".
Reid, along with Theresa Ng and Tan Aik Kiat, were appointed as receivers and managers yesterday. Expressions of interest will be called shortly.
Adding that the company would work with tour operators to ensure smooth operations throughout the receivership, Reid said it would be "business as usual" at the Singapore Flyer.
A check of the Accounting and Corporate Regulatory Authority's database showed Singapore Flyer Pte Ltd has three directors: British citizen Paul Francis Hodgson, Dutchman David Paulus Schuilwerve and Singaporean Ong-Hahl Boon Li Patsy.
The 165m-high wheel was officially launched in Singapore in April 2008 to much fanfare.
Trouble surfaced soon after.
In December 2008, the wheel was shut for a month after it broke down, leaving passengers stranded for close to six hours in its cabins. After the incident, a group of 14 business owners took legal action against the company for losses incurred during the breakdown.
In 2009, the company's German investors tried to oust several Singapore Flyer board members, citing under-performance. Rider numbers have also been reported to be below targets.
Gevin Png, a senior lecturer at Temasek Polytechnic's hospitality and tourism management programme, put the Singapore Flyer's situation down to the lack of a local customer base.
"Locals are priced out and they can view similar scenery from tall buildings nearby. It's not unique," he said, adding that attractions need local support to be successful. "Look at the Singapore Zoo. It is packed with locals on weekends."
Profit margins have also been watered down by steep discounts given to travel agents in recent times to entice them to include the Singapore Flyer in their tour packages, he said.
An adult ticket for a ride there is priced at S$33 (US$26). Children aged three to 12 pay S$21. Those below the age of three ride for free.
The Singapore Tourism Board, which leases land to the Singapore Flyer, told The Straits Times it will be "engaging the various parties involved to ensure the best possible outcome that enhances the tourism sector".
However, liquidators like Abuthahir Abdul Jafoor of the accounting firm Stone Forest Corporate Advisory point to the possibility of a bleaker picture.
"If the sale of the assets does not cover the debt, the company could potentially be wound up," he said. "If that happens, any remaining assets would be sold off to the highest bidder including overseas buyers."
Singaporeans such as Poh Yen Li, 29, said they hope the Flyer continues to operate.
The accountant, who has taken rides there five times, called it an "iconic attraction". "It really defines the skyline. It would be a pity to see it go," she said. "It's a fun experience but the tickets are quite expensive."