£167m Euro Disney bailout plan

A FINANCIAL restructuring of Euro Disney, the overborrowed Paris theme park operator, has finally been thrashed out after nine months of talks.

The company and creditors are reported to have agreed a e250m (£167m) fund-raising that will be supported by The Walt Disney Company of California.

The planned cash call will help to restore the balance sheet of the business, which breached banking covenants after visitor numbers slumped in the wake of the 2001 terror attacks on the US.

The company, chaired by Frenchman Andre Lacroix, is labouring under debts of e2.4bn.

The Walt Disney Company, which owns 39.1% of the stock, has already agreed to waive royalties on the use of its brands, and provided a standby loan facility to help ease Euro Disney's cash problems.

The bailout will be the second since Walt Disney launched its European theme park operations in the early 1990s.

Despite becoming Europe's top tourist attraction, with more than 12 million visitors a year, Euro Disney has failed to break into healthy profits. In the year to the end of September it lost e45m on revenues of e1.05bn.

Under the deal now proposed, The Walt Disney Company will guaranteee e100m of a new cash raising. CDC Ixis, an arm of French state investment bank Caisse des Depots et Consignations, which is owed e900m since the earlier bailout, will guarantee half of the rest.

The other e75m will be underwritten by a panel of creditors led by Citigroup, ABN Amro and Rothschild.