By Inti Landauro
PARIS--Walt Disney Co. (DIS) Monday announced a project to bail
out its French unit Euro Disney (EDL.FR), which operates the
eponymous theme parks outside Paris, after attendance fell this
year.
The U.S.-based parent company will make a capital increase worth
1 billion euros ($1.26 billion) to Euro Disney. Disney will make a
capital increase in Euro Disney for EUR420 million and will convert
EUR600 million worth of debt it is owed into equity, the French
company said Monday in a statement.
Euro Disney faces gaping losses this year as a result of the
falling attendance. The company said it expects net loss to widen
to between EUR110 million and EUR120 million this year down from
EUR78 million last year. The company's overall revenue is likely to
fall between 1% and 3% to between EUR1.27 billion and EUR1.30
billion.
After the first nine months of the year, Euro Disney estimates
the attendance to its theme parks will fall this year to between
14.1 million and 14.2 million visitors down from 14.9 million
visitors in 2013.
Walt Disney will also add new debt to its French unit and delay
the maturity of existing debt, as a result Euro Disney's total
gross debt will rise to EUR1.75 billion up from EUR1.71
billion.
The operation will be submitted to Euro Disney's shareholders
and is expected to be completed in the first half of 2015. Minority
shareholders would have the possibility to subscribe to the capital
increase under the same conditions as Disney.
Write to Inti Landauro at inti.landauro@wsj.com
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