LITVINOVKA Entertainment has now a strategic investor

The world financial crisis made the construction sector in Ukraine freeze and the most interesting projects stayed on paper. LITVINOVKA Entertainment is an exception. Unusual concept and organization of Euro-2012 in Ukraine did it business: a large international investment fund signed a Letter of Intent with the author of idea and the owner Vadym Bukhkalov for the construction of the resort before the European Football Championship. After an Independent Review is done LITVINOVKA Entertainment can receive its first financial tranche. I was lucky to talk about this with Vadym during another trip to LITVINOVKA.

The laying of the first stone of complex coincided with beginning of world financial crisis…

It is actually so. On September 12^th we arranged a grandiose celebration on the occasion of laying the first stone of LITVINOVKA Entertainment, and on September, 15^th Lehman Brothers collapsed, having given the push to the crisis. It overflowed Ukraine among one of the first countries, and my companies suffered much from this financial storm. Therefore, the building of the complex had to be set aside for some time. The only thing that worked in LITVINOVKA was the zoo which was visited with pleasure by local schoolchildren. However, our efforts on advancement of LITVINOVKA Entertainment were not vain: after a while the representatives of large international investment fund got in touch with us and offered cooperation. After short negotiations we signed a Letter of Intent and approved the terms of agreement. This investment fund has already developed a number of large projects in the world. In Ukraine they were interested exactly in tourist business, so LITVINOVKA was 100% what they were looking for.

So when the construction will be resumed?

At first an Independent Review, appointed by an investor, has to be finished. As far as I know the independent experts were satisfied by everything, what has already been done in the project. Now they are studying the overall situation in Ukraine, processing the formal data, analyzing the economic model of LITVINOVKA Entertainment, calculated by the world famous consulting company “Horwath HTL” etc. In the projects of such kind this is a mandatory working procedure, preceding the Financing agreement and the actual inflow of funds. The Review will be finished in app. in one month, and then we will be able to say the name of the fund and the conditions of our alliance. Specialists agree that the project can be constructed in 2-3 years. Thus, we can easily be ready till Euro-2012.

So it means that the investor believes in success of LITVINOVKA in spite of the crisis?

Yes, because crisis is a temporary event. By 2012 it will be left behind. I think that in a couple of months we will reach the long-awaited bottom, after what a long period of stagnation will take place. But maximum in a year we will see an economic development again… The current economic crisis is compared with the Great Depression of the 30-ies. But, as a matter of fact, these events cannot be compared. At that time people were dying of hunger and unemployment reached unprecedented levels. In comparison with those times what we are witnessing now is a light turbulence. There are “sold out” notices in the sport clubs: the time, which became free now, people spend for improvement of their health. Our latest boxing event has sold no fewer tickets than usually. And this happened even when the main fight was performed by little known Aleksandr Ustinov. It means that in spite of the difficulties people will still want to do sports and have fun. And it means that the infrastructure of LITVINOVKA Entertainment will be of demand in all times. I’m glad that the investor understands that.

Is it possible that the investor may want to change the concept of the project?

Actually, it was the concept which attracted the investor, that is why I’m sure that it will remain. Our new partners liked the idea of the fully integrated resort that combines business, sport and leisure. However, I concede that the details of the project may change. I keep perfecting the project myself, comparing my creation with the best world complexes of such a kind. Last thing, I have changed, is a remoteness of a hotel from all the other buildings. The best world hotels are united with entertainment and sport complexes, what enables the hotel visitors to enter the aquapark, Spa-center or multifunctional arena even without outer clothing. The administrative building, on the contrary, should be relocated to the area behind the parking lot or simply hidden in the complex of other buildings. I think that it is necessary to improve the entrance group that has to attract attention with some architectural masterpiece; it should be unique and bright…

Which world resorts and hotels are you taking for an example when perfecting the project?

First of all, it should be noted that every such project is unique and each of them hasn’t got an identical twin in the world. But a net of Sea World Parks in the USA is a pattern for me in the field of water entertainment. Killer whales, dolphins, oceanariums and water parks – all of them take your breath away. Certainly, there will be no killer whales in LITVINOVKA, but business will be built based on the model of Sea World.

Pros and cons of safari-parks I have studied in Mauritius, Tenerife, Italy, Germany. The best features will be implemented in LITVINOVKA. In addition, I like the business model of hotel operations in Las Vegas, where each hotel complex is ten-times bigger that our whole resort. Each has an arena, swimming-pools and a whole range of various leisure activities. Mandalay Bay, MGM Grand, Bellagio, Mirage – these names are famous throughout the world. In Bellagio one fountain costs tens of millions of dollars, and when the Cirque du Soleil or O-theatre makes a performance, each of the shows account millions… This is a different world, which I would like to show to the citizens of Ukraine at least partly.

Can LITVINOVKA really step in one row with such famous projects?

And why not? I’m sure that after the “Euro-2012” numerous foreign guests will want to come back to Ukraine. Many of them will advice their friends to visit our country. And we have something to look at! And if till this time we are able to build LITVINOVKA Entertainment, this resort will attract foreign guests that got used to excellent service and fond of active leisure in natural environment.

Do the government officials understand that, because much depends on them?

We are supported on every level of government authority, beginning from the village council and ending up in the Ukrainian Parliament. Soon the MPs will vote for the new Law “About Euro-2012”, which provides a lot of benefits and other real help for the projects connected with European football championship. We along with investor rely on this law…

Did the amount of investments remain on the same level of US$ 150 mln?

Yes, we have not changed our calculations, but this figure will rather be much lower, because now Ukrainian prices for construction materials and works have decreased. And it is much more beneficial to begin construction now that earlier.

Earlier you said that you want to manage the resort. How does investor consider this?

The operational management will be performed by the Managing Director, and I will enter the Steering Committee along with an investor. The pay-back period is 5-6 years after the fully-integrated resort is launched. But I think that there is no need to plan ahead too far. Currently, the main goal is to pass the mandatory procedures, which precede the financing, then to construct and to launch the project. And I will do my best to make LITVINOVKA work…

We can only wish success to Vadym. It would be so magnificent to spend a day among the shadowy tennis courts and water attractions, to swim with real dolphins and to drive on a Jeep through the forest full of deers and roes…

By Dmitriy Sinyak