Even the land of fairy tales can't escape from France's economic woes.
Euro Disney today announced a €1bn recapitalisation plan to help it recover amid a souring European economy.
The recapitalisation is backed by its parent Walt Disney, which owns almost 40 per cent of Euro Disney and had to bail it out in 2012 by taking over Euro Disney's loans from a syndicate of banks.
Under the new plan, Walt Disney will offer a cash contribution of around €420m to Euro Disney, and will convert €600m worth of its debt into equity. The hope is to lift Euro Disney's cash reserves by around €250m and reduce its debts to Walt Disney to just under €1bn.
Tom Wolber, president of Euro Disney, said in a statement this morning: “Disneyland Paris is the number one tourist destination in Europe, but the deterioration of the economic environment and the debt burden of the Group have strongly impacted revenues and liquidity.
“This proposed recapitalisation of Euro Disney is essential to strengthen its financial position and allow us to continue to invest in the park to improve visitor experience.”
The plan failed to impress investors, however, as shares in the struggling Parisian theme park went down by 19.7 per cent to €2.78 on the Euronext stock exchange following the news.