Monday, October 06, 2014

Euro Disney gets financial help

This article at BBC News talks about a financial restructuring package that Euro Disney is arranging to help its Disneyland Paris operation. This is being called a bailout or rescue plan by some. Attendance numbers at DP have been dropping off lately and the parent Walt Disney company, which owns about 40% of Euro Disney, is "contributing" 400 million Euros to help the cause.  An additional 600 million Euros is planned to be raised by converting debt to stock shares, brining the total infusion to a billion Euros or about $1.3 billion.
"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," said Tom Wolber, president of Euro Disney.
Euro Disney stock shares dropped significantly after the announcement.  Being number one in a shrinking market is not going to help if revenue falls below a certain level, which it apparently has. 
Euro Disney said on Monday that it believed a new financing package would allow it to invest in the business and boost visitor numbers.
No details yet on what will be done to improve attendance, but it would seem that it will take more than short term fixes given the economic climate in Europe.

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