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Paris (pte041/12.01.2005/15:30) - Cash-strapped theme park Euro Disney http://www.disneylandparis.com is set to receive financial support from Saudi Arabian Prince Alwaleed bin Talal. As the Wall Street Journal (WSJ) http://www.wsj.com reports, Prince Alwaleed has said he will buy as much as 25 million euros in new shares to help secure the financial situation at Euro Disney. At the same time, the company is preparing to launch a 250 million euro equity rights issue, the final step in a plan intended to spare it from a bankruptcy filing. On news of the prince's financial support, Euro Disney shares rose 16 per cent to 29 European cents.
The current shareholding of Prince Alwaleed in Euro Disney is worth 16.3 per cent. However, the announcement may mean that he ends up holding a smaller stake after the issue. Walt Disney http://disney.go.com, who with a 40.6 per cent stake is Euro Disney's biggest shareholder, has already said it will subscribe to 100 million euros of the 250 million euros in new shares. However, it remains to be seen how willing other investors will be to increase their investment in the company. Only recently, Euro Disney warned that it will continue to post losses for the next few years at least.
Since Euro Disney's market debut, its stock has fallen 98 per cent. In September last year the company was just able to avoid going bankrupt at the last minute. Disneyland Paris and Walt Disney studios are the top tourist attraction in Europe with 12.4 million annual visitors. In the last quarter, the company's revenue rose by 3 per cent to 268.9 million euros. However, large debts and a continued tourist slump brought the company into a difficult financial situation.
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