Adventure World Warsaw back on

Rafał Ostrowski, ‘Eurobuild CEE’: In September 2013 the media reported that Adventure World Warsaw had filed for bankruptcy. You said at the time that the company could not meet its financial obligations. What has changed since then?

Peter Jan Mulder, CEO and majority shareholder of Adventure World Warsaw: The main thing that has changed, especially last year, is the atmosphere around this project. Until then the shareholders of the project were not willing to sell it, because they didn’t see the possibility of getting the right agreement in place. Now we are negotiating the sale with a potential buyer, CMT, which is the project manager and designer, have re-opened the construction site to maintain the building permits and extend them. In the near future, if all goes well, we expect full-blown construction to be able to start. So if you ask me, the project is back on.

Since you mention the atmosphere around it, this project has had some very good, but also very bad moments during its five-year history. From the very beginning what raised the most doubts was how such a small company like Adventure World could handle such an enormous project. You seemed to have almost no track record, few resources of your own and you were apparently not backed by any investors with enough clout for this scale of investment. How did it come about that you started working on such an immense project?

In fact, at the beginning it was meant as a very small project. An investment of less than EUR 50 mln. I started it together with my Dutch business partner Henk Roodenburg in Złotokłos, close to Piaseczno. We both had the idea that we would finance it on our own, we would build a small park and then legit grow over time. And we designed such a small park. But then this project collapsed because of protests from the local residents. At that time we were approached by Royal Imtech, a giant company with EUR 5 bln of annual revenue. The CEO of Royal Imtech contacted me, and said that they wanted to grow in Central and Eastern Europe, and they liked the project that we were developing in Warsaw. He instructed the Polish and the German branches of his company and they came to me. They became gradually more and more involved into the project, first as the designer, then as the subcontractor and then the general contractor. With Imtech we came to Grodzisk Mazowiecki and it was Imtech who pumped up the project to EUR 750 mln, 240 ha of land, hotels, a great theme park, a brilliant idea and so on.

But this also seemed absolutely incredible at the time: how did your small company manage to sign a stunning EUR 750 mln contract with the general contractor, apparently without having secured the financing for this?

The answer is very easy. Royal Imtech was offering a full turn-key construction contract together with its financing. That is why we signed it. They were to provide everything from A to Z. They were even partially funding our day-to-day operations.

That must have seemed like an unbelievable opportunity for you?

That was a dream comes true for all of us, when a EUR 5 bln company gave us a contract to build and finance the project. Normally we would never have signed such a large contract not having secured its financing.

Why haven’t you disclosed this information previously? Much of the media speculation about the sources of the financing was damaging to AWW at that time. If you had disclosed it, it probably would have ended much of this talk.

Because I was bound by confidentiality clauses. They were a stock listed company. Now, since they are gone, the situation has changed and I can tell you all about it.

When did you realise that the Imtech dream was about to evaporate?

Christmas 2012. It became obvious that Royal Imtech could not get the finance together.

How did you realise that?

We saw the response from the banks. They were not willing to provide credit based on the guarantees given by Royal Imtech – and then it was clear that there was no money.

What did you do?

I and the other shareholder Henk Roodenburg went to the Royal Imtech headquarters in Gouda in the Netherlands. There was a new CEO at that time, to whom we outlined the structure of the deal and we told them it was not going to work. Four days later they announced that it was all over. On February 5th, 2013 Royal Imtech announced their EUR 100 mln write-off of the AWW project.

At that time and later on some of the press created the impression that Royal Imtech was in huge financial trouble because of the unpaid work it did for AWW. These write-offs amounted at some point to as much as EUR 360 mln or more. How could they have had such significant losses from construction that hadn’t started yet?

They couldn’t. It was all untrue. Royal Imtech did not invest more than EUR 22 mln – that was the working capital that they loaned to AWW and they also did some simple mechanical, electrical, engineering drawings, which cost app. EUR 5 mln. So there could never have been such losses from this project.

So why did Royal Imtech present it so differently?

They wanted to blame AWW for their own wrongdoings. But eventually they failed. We stayed and I fought every inch of the way with them. They lost completely in the end. In August 2015, Royal Imtech went bankrupt due to their internal fraud and corruption.

But back in 2013, when your contract with Imtech failed, what did you do?

We invited Royal Imtech to look into our books to see if there were any irregularities. They never came. In March 2013 we signed a settlement with Royal Imtech and we agreed to the consolidation of all our loans from Imtech and for their six month repayment. Then we started looking for investors to repay this loan, but we couldn’t find any, because there was simply this very bad smell lingering around the project. So by the end of September 2013, Royal Imtech filed for the bankruptcy of AWW. But the court dismissed the appeal on the grounds that the liquid assets of the company are non-existent and thus it was impossible to finance the cost of the bankruptcy. It ruled that AWW’s shareholders need to find a solution that satisfies the creditors without the court’s involvement. So in March 2014, I got the whole project and the property back under control.

But your main problems didn’t go away at that time. Your company was still unable to meet its obligations towards its creditors and there was no financing for the project. Right?

Yes. When the court declares you insolvent and gives you the company back, then getting the finance back on track is even harder than before. But we still believed in this project and we were committed to reviving it.

Has the bankruptcy of Royal Imtech helped you somehow?

In a way it did. This cleaned up the atmosphere and thus made things easier for us.

What are the main advantages of the project you want to sell?

Our location is fantastic: direct access to the motorway, half an hour from the airport and from the city centre. There are plans for a faster train to go close to the park, so you would be in Grodzisk within 15 minutes from Warsaw Central station. I believe it would be very difficult to find locations close to Warsaw that have all these positive logistical aspects. On top of that I think that everybody in Poland wants this project and the cooperation with the Grodzisk authorities is also fantastic.

You still have the building permits for the park. Right?

We have building permits for 85 pct of the park. Just the shopping centre and entertainment village don’t have building permits yet.

The building permits are not expiring?

The law is clear about building permits. That is why we have opened the site and are carrying out geodetic surveys. Having the building permits in place, a potential investor would not have to wait three years to create the whole park from scratch.

Why three years?

If you started today, for receiving the environmental decision you could well wait two years. Only then could you start the building permit procedure, which usually takes another year. Together with purchasing the plots, to get the entire process to the point where we are now, has taken us four years. Of course, the project’s phasing, which we have been planning, and all the other possible ideas that might come up later, could result in changes to the current building permits, but it is possible to adapt them, which is a lot easier and can be done once things are underway.

You also have some emerging competition. About a 20 minute drive from your site, construction is gearing up for the Park of Poland theme park.

But this is very healthy competition. Even if two parks were built very close to each other they would work like magnets. They would both attract even more people. Look at Florida – you have Disney World there, Universal Studios and so on. Altogether about ten parks in one location.

So when will we see Adventure World Warsaw completed in Grodzisk Mazowiecki?

This I don’t know, but what I can tell you right now is that the investor who finalises the agreement with us can embark on this project the next day, because it is already rolling.

And as long as there is no agreement we cannot talk about any dates?

No. I don’t want to make things out to be better than they really are. I am telling you straight the state of things as they are right now.

Adventurous Dutchman

Peter Mulder is a Dutch businessman and the CEO of Adventure World Warsaw. Through Luxembourg-based company Tambor SAR.L., he holds a 62 pct stake in AWW, while the remaining 38 pct is held by Henk Roodenburg through Dutch company JAO. The company has invested app. EUR 59 mln so far, of which EUR 7 mln has been put in by Peter Mulder, EUR 30 mln by Henk Roodenburg and EUR 22 mln by Imtech Group. The cost of the land comes up to app. 37 mln while the remaining EUR 22 mln was spent on designs, operational costs and some work on the site, including archaeological research and geodetic work, the demolition of farm houses and the upgrading of temporary roads.