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Challenger Acquisitions invests in second giant wheel project, this time in Texas

Challenger has invested US$300,000 towards the pre-development costs of the Eye of Texas, with the option to invest up to a further US$700,000 in this tranche
observation wheel
Challenger’s initial investment of US$300,000 would convert into an equity stake of around 4%

Challenger Acquisitions Limited (LON:CHAL) has invested in a second giant observation wheel project, this time in Dallas, Texas.

The AIM-quoted firm has invested US$300,000 towards the pre-development costs of the Eye of Texas, with the option to invest up to US$1mln in this first tranche. The remainder of the US$3mln of pre-development costs is being raised by local developers.

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Challenger said the decision to invest in the Texas project is in line with its strategy to acquire interests in the leisure and attractions sector that offer both near and long-term revenue prospects.

It also complements its US$3mln equity stake in a similar project in the New York wheel which is currently being built on the New York Harbour.

A team of developers has been working on the EoT for three years now, during which time “significant equity” has been invested and planning has commenced.

A seven acre plot of land has been contractually secured in the Dallas-Fort Worth area where the 165m wheel will sit. To put that in perspective, the London Eye is just 125m high.

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Once the EoT has been constructed, Challenger will have the opportunity to operate it.

“We are incredibly excited to have now made an investment in our second Giant Observation Wheel Project, marking an excellent start to 2018,” said chief executive Mark Gustafson.

“The Eye of Texas is highly complementary to our investment in the New York Wheel.

“An entertainment complex and the improvements to mass transportation will attract tourists outside of this highly populated area of 7.2mln people, and as such we anticipate strong traffic to the EoT.”

To fund its initial investment, Challenger has received the remaining £400,000 from its £1mln convertible note facility. 

Shares jumped 21.5% to 0.73p at the opening bell.

--Updates for share price--

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