Euro Disney says it's agreed a 1 billion euro funding deal backed by its largest shareholder, the Walt Disney Co, which includes a share sale and a debt restructuring. Hayley Platt looks at what's gone wrong at the theme park?
It's Europe's biggest tourist attraction. Clocking up more than 275 million visitors since it opened in 1992. But the numbers have been falling in recent years leaving Euro Disney with crippling debts. It's just agreed a 1 billion euro funding deal backed by its largest shareholder - Walt Disney - which could give the U.S. group total control. But investors aren't convinced - shares fell almost 20 percent. Mike Ingram is from BGC Partners. SOUNDBITE: Mike Ingram, Market Analyst, BGC Partners, saying (English): "They had to go to their parent only two years ago and even though this debt recapitalistion is going to bring the debt down to something like 1 billion euros, the debt will still be something like six times earnings from the current 15, which doesn't necessarily put it in a very good place going forward given its operational gearing and given the fact that attendance is still falling at the theme park." Disney's U.S. parks don't suffer the same problem. Disneyland, it's first park was an instant success when it opened in 1955. Paris was considered an ideal base for its European debut. But it's struggled to adapt to the cultural differences - initially refusing to sell alcohol in a country where a glass of wine at lunchtime is the norm. SOUNDBITE: Mike Ingram, Market Analyst, BGC Partners, saying (English): "Euro Disney has been struggling for years. It's only since 2008 that Euro Disney started to make any sort of a profit. They've continued to have to invest in the park over the years which has meant cash flow has been extremely poor." The refinancing will consist of 420 million euros in cash, including a 350 million euro rights issue. 600 million euros of debt will also be converted into equity. It will boost Euro Disney's cash position by about 250 million euros. And enable it to improve its structural problems But with visitor numbers down and now investors unimpressed the Magic Kingdom may struggle to regain its sparkle.