Disneyland and HK seek to thrash out refinancing
August 3rd, 2008
The Walt Disney Co and the government are trying to thrash out an agreement on proposals from the entertainment giant to refinance their Hong Kong theme park’s HK$2.6 billion in loans.
Disney have offered to replace the Hong Kong operation’s commercial- loan facilities “with loans from the company,” the company said in a US stock-exchange filing. Disney controls 43 percent of Hong Kong Disneyland, the rest is held by the government.
“We offered to support the project’s short-term needs by assuming outstanding bank debt,” said Disney vice president of corporate communications Jonathan Friedland. “We’re disappointed that the two shareholders have not reached agreement on the loan issue.”
Hong Kong Disneyland has a commercial term loan with a balance of HK$2.3 billion which matures on September 30, according to Disney’s stock exchange filing. The park’s revolving credit facility had a balance of about HK$300 million as of June 28. Disney said it also told the government of its willingness to provide “additional investment” to meet the park’s longer-term financial and development needs.
Friedland said Disney believes the solution it offered is the best option for sustaining the growth momentum that Hong Kong Disneyland is enjoying.
Losses at Hong Kong Disneyland decreased during the three months ended June 28, 2008, Disney said in the stock exchange filing.”For the past quarter, Hong Kong Disneyland has continued to record he
althy growth in its business,” a spokesman for the park said.
A government spokeswoman said the government has made counter- proposals “for the sustainable development of Hong Kong Disneyland and for the government’s interests as a majority shareholder of the park.” Officials are currently awaiting a response from Disney, she said.
“The government looks forward to promoting the sustainable, healthy long-term growth of Hong Kong Disneyland, and we are discussing with [Disney] in this light,” she said.