PARIS — Euro Disney is going back to the well with plans to borrow 2.5 billion francs ($405 million) to help finance the building of a second theme park, Disney Studios, outside Paris.
Euro Disney, the parent company of the Disneyland Paris park, said Wednesday that the second park, which will be near the existing site’s location at Marne la Vallee, will cost $643 million and will be open for business in fall 2002.
The company, which almost sank under a sea of red ink prior to a massive financial restructuring plan in 1994, will take out a $400 million long-term loan from France’s state-owned Caisse des Depots et Consignations (CDC), one of Euro Disney’s principal banks.
The remaining $243 million will be raised via an equity offering. The Walt Disney Co. will back 39% of the offering, worth around $94 million, in line with its current stake in Euro Disney.
Prince participation unknown
Speaking in Paris, Euro Disney chairman Gilles Pelisson said he didn’t know whether Saudi Prince Al Waleed bin Talal, who holds 24% of Euro Disney, will invest further. The prince has an agreement with Disney to scale down his stake to a maximum 19.9% by September 2000.
According to Pelisson, Disney Studios will be themed around cinema, animation and TV, and will include production facilities as well as playing host to the Disney Channel (France).
Describing the expansion as “a historical moment,” Pelisson said the company expects 4.2 million visitors in 2003, the first full operational year. In 1998, Disneyland Paris attracted 12.5 million people and Euro Disney reported net profits of $46 million.
In a separate development, Euro Disney has succeeded in renegotiating the interest rates it pays on $562 million worth of loans it already has with the CDC. The rate has been cut from an annual 7.85% to 5.15%, a saving of around $15 million a year.