Two sides can't agree on how to refinance loans
HONG KONG — Walt Disney and the Hong Kong government are fighting over loan financing at the Hong Kong Disneyland theme park.The park, which is 57% owned by Hong Kong and has been open nearly three years, is due to repay HK$2.5billion ($325 million) of loans in September. But the two sides can’t agree on how they should be refinanced. Tussle was revealed in a filing to the U.S. Securities and Exchange Commission as part of the Mouse House’s third quarter results report. Disney says it is willing to take on the loans and provide extra investment for the park but reports that it has met resistance from the government. If they can’t agree, the park operators may have to turn to the commercial credit markets, which would likely be more expensive than credit from Disney or the government. Disney spokesman Jonathan Friedland said its offer could give the joint venture some “financial breathing room,” allowing it to shore up its balance sheet and build on the recent gains. The park has failed to meet attendance expectations. Because of the underperformance, Disney has temporarily waived management fees and royalties. The park could benefit from special visa dispensations that potentially allow easy access for 8 million to 16 million migrant workers in the neighboring Chinese province of Guangzhou.
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