The Walt Disney Co. backs up Euro Disney to rehabilitate the troubled theme park complex Disneyland Paris.
Euro Disney, the operator of Disneyland Paris, revealed Monday a billion euro refinancing plan to save the theme park. Their shares plummeted on the Paris market, and though increased, still closes with a loss of 10%. The parent company in the U.S. steps in to help with the plan, which includes a cash infusion of $526 million and converting into shares the debt owed by French company.
The Paris theme park hasn't made a profit since 2008, affected by the decline in Europe's economy. Their sales are down by 3% this year that can lead to a loss of €120 million this year, an increase from the €78 million loss in 2013.
Tom Wolber, president Euro Disney, said in a statement, "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." The emergency plan is needed to improve the company's financial health and to continue making investments.
Disneyland Paris opened in 1992 and dubbed as "cultural Chernobyl" as people doubted its fusion or French and American traditions. It took the time before it became a popular destination, but over the years, it attracted a total of 275 million guests. Visitors of Disneyland Paris amount more than the number of combined guests of Mona Lisa in the Louvre Museum and Paris's iconic Eiffel Tower.
On Monday, the firm revealed that there's a drop of 700,000 to 800,000 visitors over the past year. In the 2012-2013 period, the theme park already lost a million guests.
The park has a debt of €1.7 billion, but with the help of Disney U.S. turning the debt into equity, they could tone down the loss to less than a billion Euros.
