Walt Disney Co to the Rescuse
Walt Disney Co has come to the rescue of its loss-making subsidiary Euro Disney with a 1 billion-euro ($1.3 billion) funding deal announced on Monday, which could give the U.S. group total control over Europe’s biggest tourist attraction.
The deal includes a rights issue and debt restructuring which will inject 420 million euro in cash into the Euro Disney group and eliminate 600 million euros of its debt owed to Walt Disney via an equity swap.
Euro Disney is currently 40 percent owned by Walt Disney and 10 percent by the Saudi prince AlWaleed bin Talal with the rights issue to raise 351 million euros open to all shareholders but backed by Walt Disney, which will be required to make a tender offer for the whole company.
Twenty miles east of Paris, the resort has struggled amid the economic downturn in Europe, with attendances down by 700,000 to 800,000 visitors at just over 14 million visitors in the last year. At the same time its total debt of 1.75 billion euros which is owed to Walt Disney has hampered its ability to invest in upgrades to the park.