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Disneyland Paris to Raise €1 Billion to Secure Future

The Walt Disney Company (NYSE: DIS) has announced support for a recapitalization plan worth €1 billion in respect of Euro Disney S.C.A. (EPA:EDL). Euro Disney S.C.A. is the parent company of Euro Disney Associés S.C.A., operator of Disneyland® Paris.

By refinancing, Euro Disney S.C.A. hopes to secure the future of Disneyland Paris, Europe’s most popular visitor attraction, which hosted 15.6 million visitors in 2013.

The Walt Disney Company currently owns a minority stake in Euro Disney S.C.A.. However, the refinancing deal would allow Euro Disney S.C.A. to turn €600 million of debt owed to The Walt Disney Company into equity in Euro Disney S.C.A. and of “its principal operating subsidiary”.

The statement from The Walt Disney Company read thus:

“This recapitalization plan would improve Euro Disney Group’s financial position and enable it to continue investing in the guest experience. With this effort, we are demonstrating The Walt Disney Company’s continued confidence in Disneyland® Paris, which remains the number one tourist destination in Europe.”

The remainder of the money would be used in consolidation of credit lines from The Walt Disney Company to Euro Disney S.C.A. and a €420 cash infusion “made or guaranteed by Disney through capital increases of Euro Disney S.C.A. and of its principal operating subsidiary”.

Through these arrangements, Euro Disney hopes to improve its cash position by €250 million, reduce its indebtedness to The Walt Disney Company from 1,748 million euros to 998 million euros and improve the Euro Disney Group’s liquidity through interest savings and deferral of amortization of loans until final repayment in 2024.

Shareholders will have a chance to participate in capital increases of Euro Disney S.C.A. alongside with Disney, at the same price.

Shares in Euro Disney S.C.A. fell a dramatic 21% on Monday morning, but have since begun to recover.

About Business Desk

Business Desk
Editors and staff from the Business Desk at The Global Herald.

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