TIME is running out for Mickey Mouse’s European adventure. Euro Disney, the debt-hobbled theme park operator, is hoping to sign a preliminary agreement on Tuesday with lead banks BNP Paribas and Calyon, and core investors Walt Disney Co and state bank CDC, paving the way for a 250m rights issue.
Euro Disney is racing to finalise details of its long-awaited 2.2bn debt restructuring, aiming for a full agreement with all its bank creditors by the end of June. But with time galloping away, the shares hit historic lows last week, slumping 2.94% to 0.31 on Thursday.
Under the outline agreement, the Burbank-based parent will underwrite 100m of the 250m capital increase needed to pump in fresh cash. CDC and the other creditor banks would underwrite the rest. Walt Disney, which owns 39% of Euro Disney, has also agreed to accept royalty payments tied to the achievement of specific financial milestones.
Euro Disney has been struggling to restructure its debt since November as low attendance at its two theme parks and hotels in the east of Paris has undercut its ability to repay the debt burden.
But even with a new debt deal, the market is worried that ticket sales will still be too low to keep the park going.
