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Euro Disney Wins Waivers, New Credit Line

November 06, 2003|Richard Verrier

Euro Disney, the cash-tight operator of the Disneyland Paris resort, got some financial breathing room Wednesday.

The company, 39% owned by Walt Disney Co. of Burbank, said it obtained waivers from its lenders and a $52-million credit line from Disney. The credit line can be drawn only after an existing $193-million credit line from Disney is fully tapped.

The waivers and the credit line "will allow time for the parties to develop a mutually acceptable resolution to the company's future financing needs," Euro Disney said.

The credit line and the waivers, however, apply only through March 31. The question of how Euro Disney, which operates two theme parks at Disneyland Paris, meets its debt obligations beyond then remains uncertain.

"It still leaves open the question of what the long-term fix is," said Bob Yow, an analyst with Bear Stearns in London.

The waivers and the credit line mark the first step toward a financial restructuring of Euro Disney, whose parks have struggled to meet attendance projections. Euro Disney warned this summer that it might default on debt payments and is expected to report wider-than-anticipated annual losses Nov. 17.

Europe's largest tourism resort has struggled with high debt and a falloff in travel from feeder markets such as Germany.

-- Richard Verrier

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