Challenger Acquisitions Limited (LSE:CHAL) announces an update on the New York Wheel Project (“NYW Project”) in which the Company has an equity stake (US$3 million), and the new projects the Board is currently evaluating which Challenger believes will offer strategic growth opportunities for the Company.
New York Wheel Project
As previously announced, due to a contractual dispute with the wheel erectors, New York Wheel has terminated its contract and is in advanced negotiations with American Bridge Company, a very experienced engineering and construction firm that has completed a significant proportion of the world’s large bridges, marine installations, and other complex structures, including the Giant Observation Wheel in Las Vegas in 2014 (see www.americanbridge.net). A court hearing is scheduled for 26 October 2017 in New York where the New York Wheel and the former wheel contractor will discuss the transition matters related to the extensive work done by the various subcontractors for the NYW Project. Further updates will be made as and when information becomes available, however the Company remains confident that full construction of the NYW Project will recommence in the near-term.
Whilst this contractual dispute has caused delays in the construction of the 630ft Giant Observation Wheel, significant progress has been made on the 75,000 sq ft terminal and retail building terminal which will sit alongside the Giant Observation Wheel and a 950 space parking garage and a 5,000-person capacity green roof for events. Work on the major components of the Giant Observation Wheel such as the rim, cables, spindle, drive towers, capsules and control cabinets are also still in progress.
In line with the Company’s strategy to acquire or develop opportunities in the leisure and entertainment sectors which complement its investment in the NYW Project, the Challenger Board has been busy evaluating a number of projects the Company believes has the potential to offer near and long term revenue generation prospects. Three opportunities have been declined over the past two quarters as following due diligence processes the Board deemed the projects not to be a proper fit for Challenger.
However, due diligence continues on five new potential projects that have been identified and targeted in 2017, and updates will be made to the market with regards to these opportunities as and when appropriate, although there is no certainty that any will proceed. Challenger’s role may range from actively investing to partnering/operating in these businesses.
Mark Gustafson, Challenger’s Chief Executive Officer said,
“Following the restructuring process for Challenger since our disposition of Starneth we have been avidly evaluating projects which we believe will create near-term revenue and complement our interest in the NYW Project. This is not a simple or quick process, however we are very encouraged by recent developments with several of the new opportunities. Meanwhile, we look forward to the recommencement of full construction of the NYW Project, and anticipate being able to announce further updates in the near term. I would like to thank our shareholders for their patience during this time and re-emphasise that we are working hard to find the right opportunity to deliver the utmost shareholder value.”
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