Euro Disney to expand

287 mil shares being offered to fund new theme park

PARIS — Euro Disney, the holding company which controls the Disneyland Paris theme park, is to go ahead with a 230 million Euro ($241 million) share capital increase.

The offer, which involves issuing some 287 million new shares, is being underwritten by a bank syndicate headed by Credit Agricole Indosuez. The Walt Disney Co. is expected to subscribe 39% to the offer, worth some $100 million — in line with Disney’s current stake in Euro Disney.

Proceeds from the issue are destined to help finance the $641 million costs of building the new Disney Studios theme park, which will back on to Disneyland Paris and which is set to open in fall 2002.

The remainder of the financing for the second theme park will come from a $400 million loan from established Euro Disney backer Caisse des Depots et Consignations (CDC).

Earlier this month, Euro Disney reported that its net income for the fiscal year ended Sept. 30 had dropped by 47% to $24.8 million. That drop was largely down to Walt Disney reinstating management fees and royalties, worth some $40 million.Euro Disney chairman Gilles Pelisson has said he expects the Disney Studios to attract 4.3 million visitors in its first full operating year.

Analysts in Paris remain skeptical whether the second park will dramatically increase revenues for Euro Disney. Attendance at Disneyland Paris was flat, at 12.5 million visitors last year, and there is concern that the second park will simply eat into existing park business rather than create new demand.