Euro Disney in last-minute debt reprieve

9th June 2004, Comments 0 comments

PARIS, June 9 (AFP) - Euro Disney, the theme complex near Paris, said Wednesday it has won a reprieve from a debt crisis and risk of default by striking an outline deal with creditors just before a deadline expired.

PARIS, June 9 (AFP) - Euro Disney, the theme complex near Paris, said Wednesday it has won a reprieve from a debt crisis and risk of default by striking an outline deal with creditors just before a deadline expired.

The agreement, which restructures debt of EUR 2.4 billion (USD 2.9 billion), aims to "to enhance the companys liquidity and provide capital for the companys ongoing business as well as investment in new park attractions and other resort assets", it said in a statement.

Already backed by the parent group and key shareholder Walt Disney Company of the United States, and the French state-owned Caisse des Depots et Consignations investment body, the deal requires the approval of all the creditors by the end of of July.

The price of shares in the park east of Paris rallied by EUR 0.01 or 2.86 percent to EUR 0.36 on the announcement.

Last week, shares in the troubled company, which has had to restructure its finances once before, fell to a record low of EUR 0.31 ahead of the deadline for an agreement on a denbt restructuring.

The current price is still less than half the highest value in the last 12 months of EUR 0.76 in October before the company suspended debt payments.

Euro Disney warned that if it did not win approval for the agreement, it would then have to obtain suspension of loan conditions or otherwise would not be able to make debt payments due.

However, Euro Disney chief Andre Lacroix said in a statement: "The protocol agreement contains essential elements that will allow the Disneyland Resort Paris to continue its long-term growth strategy, including the financing of new assets."

No financial details were provided.

In November, Euro Disney suspended payments on its then debt of EUR 2.2 billion. By the end of March, the group's debt was estimated to total EUR 2.4 billion.

It obtained an extension of payment deadlines by submitting to financial constraints while seeking a restructuring agreement with creditors.

The French press said two weeks ago that Euro Disney would issue EUR 250 million in new capital but Wednesday's statement gave no details of that.

Euro Disney says it is Europe's leading tourist destination, with 12.4 million visitors last year. But the park needs to attract still more visitors to get its finances on a sound footing.

© AFP

Subject: French news

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