Finance: Disney bails out Euro Disney SCA

Posted at 7:37 PM EDT (2337 GMT)

Jun. 9th, 2004 -- The Walt Disney company and three French banks have agreed to rescue Euro Disney SCA, the company which operates Disneyland Paris, from defaulting, or failing to make payments, on $2.9 billion dollars of debt.

The opening of a second park, Walt Disney Studios, in March of 2002 caused losses of $742 million dollars, and the continuing travel slump forced Euro Disney to breach the terms of its loans. Under the agreement, Euro Disney will sell 300 million dollars of new shares, including 120 million dollars in shares to the Walt Disney company, which currently owns 39 percent of Euro Disney.

"This is Walt Disney's shop window in Europe," said Kilian de Kertanguy, who helps manage money in the French market. "They wouldn't want to leave it in poor financial health."

Euro Disney provides jobs for approximately 42,000 people, including 12,000 who work directly for the company.

News of the agreement prompted Euro Disney's stock to rise 2.9 percent.

For more information visit Bloomberg.com