Bankers, Euro Disney Will Hold Secret Audit Meeting : Restructuring: The fate of troubled Paris park hangs on finding solutions to its $3.57-billion debt problem.

Bankers were sworn to secrecy Tuesday as they prepared for a meeting that will seal the fate of the troubled Euro Disneyland theme park.

About 60 bankers are expected at today’s presentation, at a secret location here, of Euro Disney’s finances by auditors KPMG Peat Marwick, one banker said.

“We plan to discuss the report in detail,” said a bank official, adding that it would provide the bankers with a base for future talks with Euro Disney and its parent, Walt Disney Co.

“We’ll see (today) whether we are all on the same wavelength,” said another.

Euro Disney is trying to put together a package with its bankers to allow it to keep running its theme park and resort after Walt Disney stops financing it at the end of March.

The audit has been commissioned by Euro Disney’s bankers, who have promised to keep its contents secret.

It will allow them to discuss possible solutions to the park’s $3.57-billion debt problem, the bankers said.

It may also lead to deeper studies into certain areas such as possible asset sales.

A bank official said talks may begin with another look at Walt Disney’s initial restructuring proposals, which the banks rejected in November because they did not agree with the figures, and they also wanted more time to study the situation.

Walt Disney’s proposals included a review of interest rates and repayment periods for Euro Disney’s debt.

Analysts also foresee a capital rise of about $1.7 billion, the conversion of some of the bank debt into equity and the sale of the resort’s hotels to a third party or even to Walt Disney.

They also say Walt Disney will probably have to give up management fees and royalties it gets from Euro Disney for some time or for good.

But some of Euro Disney’s main bankers have already refused a debt-for-equity conversion, and Walt Disney is seen by analysts as also taking a hard-line approach, even demonstrating it could simply walk away from the project.

Whatever the outcome, the talks look set to be tough, and sacrifices are expected from all sides at the negotiating table.

Holders of Euro Disney convertible bonds, who have been excluded from the restructuring talks, already see themselves being offered as a sacrifice.

However, they commissioned an independent report in which a law firm concluded that Walt Disney could be held responsible for the management and operations of the theme park and could be sued.

But for the banks, an out-of-court settlement was preferred.

“Whatever the legal position may be, Walt Disney has a commercial position, as do Euro Disney and the banks,” said one banker in London. “We don’t think litigation is the right solution and is not the solution we will take.”

With the March 31 deadline approaching, banks plan to pick up the pace of meetings to reach a solution that both they and Walt Disney can accept to save Euro Disney.

If a solution is not found by then, the theme park faces the risk of going bust, auditors Price Waterhouse said in November.

“If the financial restructuring measures envisaged do not reach a conclusion in sufficient time, the group will have cash problems and will not be able to continue its activities,” Price Waterhouse said.