Disney steps in to rescue struggling Disneyland Paris

PARIS - Agence France-Presse

A file photo taken on March 31, 2012 shows Disney character Mickey posing in front of the Sleeping Beauty Castle at Disneyland park as part of the 20th birthday celebrations of the park, in Chessy, near Marne-la-Vallee, outside Paris. AFP Photo

Euro Disney, which runs Disneyland Paris, one of Europe's top tourist attractions, announced Monday it was receiving a billion-euro refinancing package to overcome a crisis after a drastic fall in visitor numbers.
      
The news sent shares in the company plummeting by as much as 21 percent on the Paris stock market, which was marginally in positive territory overall.
      
The plan, unveiled at a crisis meeting early Monday before markets opened, includes a cash infusion of 420 million euros ($526 million) by US parent company Disney and a conversion of 600 million euros of debt owed to Disney into equity.
      
Tom Wolber, president of Euro Disney, blamed the difficult economic environment in Europe for the group's problems.
      
"Disneyland Paris is Europe's number one tourist destination, but the ongoing economic challenges in Europe and our debt burden have significantly decreased operating revenues and liquidity," he said in a statement.
      
The emergency plan is "essential to improve our financial health and enable us to continue making investments in the resort that enhance the guest experience."       

Disneyland Paris, once described as a "cultural Chernobyl" for its blend of French and US traditions, opened in 1992 on the eastern outskirts of Paris in a blaze of publicity.
      
But it took time to take off and has since run into a series of crises and struggled to turn a profit.
      
Nevertheless, the site eventually built up its visitor numbers and has welcomed more than 275 million guests, making it Europe's top private tourist attraction.
      
It draws more than the Mona Lisa in the Louvre Museum and Paris's iconic Eiffel Tower combined, according to the most recent figures from City Hall.
                      
However, clouds have been gathering over Disneyland Paris and visitor numbers have collapsed.
      
The firm revealed on Monday that it welcomed between 14.1 and 14.2 million visitors between September 2013 and September 2014, a drop of between 700,000 and 800,000 compared with the same period the year before.
      
In the 2012-13 period, it had already haemorrhaged one million visitors as crisis-hit locals and tourists tightened their belts.
      
The firm has always struggled to turn a profit -- its last was in 2008 -- and it predicts a loss of between 110 and 120 million euros in fiscal year 2014, compared with a 78 million euro loss in the previous period.
      
And the park boasting Space Mountain and Thunder Mountain is also weighed down by a debt mountain of some 1.7 billion euros.
      
By converting the debt owed to Disney into equity, the firm hopes to reduce this to just under one billion euros.
      
It should also improve Euro Disney's cash position by around 250 million euros, the firm said.