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Walt Disney World news

Walt Disney Co. plans $1.25 billion bailout for Disneyland Paris

Leah Zanolla | Posted: Oct 7, 2014 | Updated: Oct 19, 2014 - 9:25:27 AM
Disneyland Paris has been struggling financially for years, and the Walt Disney Co. has come up with a $1.25 bailout plan to help the theme park out. The park opened in 1992; Disney owns 40%, Saudi Prince Alwaleed owns 10% and the rest is publicly held and traded.

A statement from Disney said, "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 Co.'s continued confidence in Disneyland Paris, which remains the number-one tourist destination in Europe."

The park's attendance dropped by almost 800,000 in the last year, down to 14 million visitors. Room occupancy rate is currently at 79% and is expected to fall to 75%. Upgrades to the park are needed, but aren't possible due to a debt of 1.75 billion euros owed to the Walt Disney Co. Net losses for the year jumped from 78 million last year to 110 million euros this year.

Tom Wolber, who became president of the Euro Disney Group last month, said, "The ongoing economic challenges in Europe and our debt burden have significantly decreased operating revenues and liquidity. This proposal to recapitalize the Euro Disney Group is essential to improve our financial health and enable us to continue making investments in the resort that enhance the guest experience."

Under the new plan, Disney would put $526 million into the Euro Disney Group and convert $750 million of the park’s debt to equity. Several loans from the Disney Company will also have their repayment dates be extended through 2024.





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