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Euro Disney deal closer

Euro Disney’s bankers and Walt Disney negotiators have moved closer to an agreement on how to refinance the ailing theme park.

Informed sources say the two sides are almost ready to shake on a complicated package of measures that would refinance the park to the tune of $ 2 billion.

The first stage of the plan is for a capital increase of around $ 1 billion, half from the Walt Disney Co. and half from a public offering. In the event there are few takers for new Euro Disney stock, the banks will buy the shares.

The second part of the rescue package is expected to see Walt Disney buy one or two of the park’s six hotels at a cost of about $ 172 million. Disney is also believed to be ready to forgo the considerable royalties it takes from Euro Disney. The banks want the royalty payments to be abandoned for at least three years.

In return, Walt Disney execs are asking for an effort from the banks that could take the form of a freeze on part of the crippling interest repayments or even writing off part of the park’s $ 3.4 billion debt.

Disney is bankrolling day-to-day operation but has said it will not continue to shoulder the burden alone after March 31.

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