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Village Roadshow's (ASX:VRL) appetite for the theme park sector appears to be waning with news this morning that it has found a buyer for Wet'n'Wild Water Park in Sydney.
The business, which is still suffering from the impact of the Dreamworld tragedy and is set to deliver FY18 earnings below the previous year's results, has been sold to Spanish leisure attraction operator Parques Reunidos for $40 million.
The final price is dependent on the financial performance of Wet 'n' Wild over the next two years to FY20, although Village Roadshow is expecting to book a pre-tax loss of about $25 million on the deal.
Settlement is planned for to occur in the first quarter of the current financial year with proceeds to be applied to reducing corporate debt.
Parques Reunidos has a portfolio of more than 60 entertainment assets globally, including 20 water parks, and the Sydney acquisition marks the group's first foray into the Australian market.
Village Roadshow says the Spanish group's experience in the sector 'will be able to add value and enhance Wet'n'Wild Sydney's performance over the coming years'.
The sale comes on the heels of Village Roadshow late last year selling to LGIAsuper the 154ha site of its Gold Coast theme parks Movie World and Wet'n'Wild in a leaseback deal for $100 million. The proceeds of that sale were also used to reduce debt.
The latest sale comes at a time when the theme park sector on the Gold Coast, and nationally, is back in the spotlight as the inquest into the Thunder River Rapids tragedy at Dreamworld gets under way.
Village Roadshow earlier this year revealed that the tragedy continued to impact on its Sydney business.
A presentation to the market in February brutally summed up how the tragedy was 'shaking the confidence' of mums taking their children on rides.
"Sydney Wet 'n' Wild sells on thrill, however Dreamworld tragedy impact was summed up by one local's comment 'those big towers gave me the 'heebie geebies'," according to the Village Roadshow presentation.
While earlier this year Village Roadshow was confident of a broader recovery in the second half of FY18, the company announced in March that full-year results for its theme park division would fall below previous targets.
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