This article first appeared in The Edge Financial Daily on August 9, 2018

KUALA LUMPUR: Perak Corp Bhd’s indirect 51%-owned subsidiary Animation Theme Park Sdn Bhd (ATP) has dropped plans to include DreamWorks’ attractions at its RM450 million Movie Animation Park Studio (MAPS) in Ipoh, Perak after both parties failed to reach an agreement to open DreamWorks’ attractions to the public by last Wednesday.

In a filing with Bursa Malaysia yesterday, Perak Corp, a 51.51%-owned subsidiary of Perak State Development Corp, said ATP had discontinued the licence agreement entered with the US’ DreamWorks Animation LLC on Jan 1, 2013 for the establishment and operation of DreamWorks’ attractions within MAPS.

“ATP has the option to extend the licence agreement to Sept 30, but decided not to exercise the option to accelerate the full opening of the MAPS as soon as possible.

“MAPS was soft-opened on June 26, without the DreamWorks attractions,” it added.

Perak Corp noted that ATP will be working closely and potentially sign a mutual termination agreement with DreamWorks to ensure all outstanding obligations are fully met, so that both parties exit the licence agreement amicably. This will include removing all DreamWorks’ intellectual properties from the MAPS before the zone designated for DreamWorks’ attractions is open to the public.

“The DreamWorks attractions zone is now undergoing renovation to remove all DreamWorks’ intellectual properties and, upon complete removal, ATP intends to open the zone with or without any third party’s intellectual property,” it said.

Based on the audited financial statements of ATP for the financial year ended Dec 31, 2017 (FY17), the related intellectual property rights acquired under the licence agreement, classified as intangible assets, had a carrying value of RM17.461 million.

This amount, together with the related inventories and estimated DreamWorks’ attractions development in progress cost of RM15.735 million, will be written off in FY18, said Perak Corp.

Perak Corp added that the board of directors is of the view that the decision was made in the best interest of ATP to ensure its ability to continue as a going concern — and the group.

“The full opening of MAPS in the near future is expected to increase visitors’ attendance number, entertainment value and repeat visitors to the MAPS, which will then translate into a higher revenue for MAPS,” it said.

ATP is a joint venture between Perak Corp and RSG Maps Sdn Bhd.