Universal Studios, Renong to build huge theme park

Universal Studios, Renong to build huge theme park

KUALA LUMPUR (AP): Hollywood entertainment group Universal
Studios will team up with Malaysia's Renong Bhd. to develop a
huge theme park that will be the centerpiece of a US$2.2 billion
project, consultants familiar with the plan said.

The two companies have signed a letter of intent that is
expected to pave the way for a detailed agreement at a later
date, sources told Dow Jones Newswires in recent interviews, on
condition of anonymity.

A Renong official contacted by Dow Jones Newswires said he was
unaware of the project.

The full project comprises, among others, a convention hall, a
golf course and hotels in the Nusajaya Township in Malaysia's
southern Johor state, near Singapore, the consultants said. It
would cover about 800 hectares (2,000 acres).

The theme park, which is under phase one, will take up roughly
half the area and require a capital expenditure of around $800
million.

Construction is scheduled to begin next year, and is targeted
for completion in 2004, the consultants said. The park is
expected to be opened in 2005.

The theme park would be modeled after Universal Studios' Port
Aventura theme park in Spain, but will incorporate some Malaysian
features.

Prime Minister Mahathir Mohamad and the Johor state government
are supportive of the project, people familiar with the plan
said.

The park is envisaged to draw in nearly 4 million visitors a
year. The whole project is expected to rope in revenue of between
$200 million and $650 million over 10 years, providing employment
for more than 40,000 people.

This would be the companies' second attempt to get the project
off the ground, industry sources said. A previous effort fizzled
out when Malaysia sank into a deep-seated recession in 1998
following the 1997 Asian financial crisis.

If the project goes through, it would be Universal Studios'
third theme park in Asia, after two in China and Japan.

Universal Studios will operate the theme park with no equity
involvement, the consultants said.

Ownership is expected to remain with Prolink Development Sdn.
Bhd. which is developing the 9,712-hectare (24,000-acre) Nusajaya
Township.

Prolink executives were not immediately available for comment.
Renong effectively owns 64 percent of Prolink via an 80 percent
stake in Amra Resources Sdn. Bhd.

Consultants said the project's location helped persuade
Universal Studios to take part in the project, which was proposed
by Renong.

The township is located near a second road crossing to
Singapore and the city-state's Changi Airport is only about 45
minutes' drive. The theme park will be able to attract visitors
from Singapore and other neighbors. companies.

Malaysia's government has launched a takeover bid for a Renong
affiliate, United Engineering Malaysia. Because of cross-
shareholdings, the takeover would put both companies under
government control.