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Struggling Euro Disney announces 1b euro crisis plan
[PARIS] Euro Disney, which runs Disneyland Paris, a top European tourist attraction, announced on Monday it was receiving a one-billion-euro (S$1.6 billion) refinancing package to overcome a crisis after a sharp fall in visitor numbers and spending.
Shares in the company plunged by nearly 12 per cent in initial trading in Paris.
The plan includes a cash infusion of 420 million euros by the parent company, US-based Walt Disney Co, and a conversion of 600 million euros of debt owed to Walt Disney into equity, the company said in a statement.
Tom Wolber, president of Euro Disney, blamed the difficult economic environment in Europe for the group's problems.
"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," he said in a statement.
The emergency plan is "essential to improve our financial health and enable us to continue making investments in the Resort that enhance the guest experience."
Disneyland Paris, on the eastern outskirts of Paris, has run into a series of crises since it opened in 1992 but has built up the numbers going through its turnstyles and has welcomed a total of more than 275 million visitors.
But the park has suffered recently from a dramatic drop in visitors - between January and June, it attracted 400,000 fewer people - a six-per cent dip.
Its net losses in the first six months this year increased by 16 per cent to 103.6 million euros compared with the previous year.
The plan, outlined at an emergency company meeting early on Monday, should improve the cash position of Euro Disney by around 250 million euros, the firm said in a statement. - AFP