Euro Disney agrees €1bn bailout over debts

Disneyland in Paris
Disneyland in Paris
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Euro Disney said it had agreed a 1bn (£783.30m) funding deal backed by its largest shareholder, the Walt Disney Co, which includes a share sale and a debt restructuring, to allow it to invest in the business.

Euro Disney, the resort based in an eastern suburb of Paris, is 40 per cent owned by parent Walt Disney and 10 percent by the Saudi prince AlWaleed bin Talal.

As part of the offer Walt Disney would be required to launch a tender offer on Euro Disney shares.

Depending on how many people subscribe to the capital hike, the company said there was a very small chance that the listed entity be removed from the stock market.

Euro Disney has struggled during the economic downturn and said that it believed a new financing package would allow it to invest in the business and boost visitor numbers.

The company said the plan will see Euro Disney receive a 420m euro cash infusion, which will include a €351m rights issue open to all shareholders and backed by Walt Disney.

The move would improve the cash position of Euro Disney by about €250m. In addition, about €600m of the group’s debt owed to Walt Disney will be converted into equity, while credit lines extended to Euro Disney by its parent will also be consolidated.

Euro Disney is the single biggest tourist attraction in Europe and has attracted more than 275m visitors since it opened in 1992.

But the company has also struggled with on-and-off losses and now has €1.75bn of debt.

“Disneyland Paris is Europe’s number one tourist destination, but the ongoing economic challenges in Europe and our debt burden have significantly decreased operating revenues and liquidity,” said Tom Wolber, president of Euro Disney.

Euro Disney’s Finance Director Mark Stead said the size of its parent’s stake after the restructuring would be affected by how many other shareholders take up the offering.