Euro Disneyland Creditors Endorse Loan Restructuring

Nearly all of Euro Disneyland’s creditor banks have agreed to sign a restructuring plan formed last month to bail out the ailing American-style theme park near Paris, banking sources said Tuesday.

Of the 61 creditor banks, only four--all Japanese--have not endorsed the plan to bail out the park’s operator, the sources told the Dow-Jones News Service.

However, the reluctance by the holdouts, which were not identified, should not hinder implementation of Euro Disney’s rescue plan, said the sources, who would not be further identified.

Euro Disneyland celebrated its second anniversary Tuesday in grim financial straits because of low spending by visitors and low hotel occupancy.

The bailout plan was reached as an emergency measure for Euro Disney, which lost $930 million in its first year.

The 57 creditor banks that will sign the final restructuring plan have agreed not to seek interest and principal payments while they work out the details with Walt Disney Co., Euro Disney’s U.S. parent corporation, the sources said.

The 57 banks hold $2.5 billion of Euro Disney’s total debt of $3.5 billion.

The Japanese banks have not agreed to sign but won’t obstruct the plan by suing Disney for overdue interest and principal, said a source from one of the major Euro Disney creditor banks.

Representatives of a committee that negotiated the rescue deal met with the Japanese banks in Tokyo last week and in Paris on Monday in an attempt to resolve issues being raised by the Japanese banks.

The committee of nine banks is led by France’s Banque Nationale de Paris and Banque Indosuez.

While the final details of the restructuring are still being negotiated between the banks and Walt Disney Co., the sources said that Disney will temporarily continue to support Euro Disney financially.

Walt Disney Co., which owns 49% of Euro Disney, said last autumn that it would carry Euro Disney financially through March 31. Banking sources, though, said that Walt Disney Co. will extend that period for a few weeks until a final plan is reached.

Among the restructuring moves, Walt Disney Co. will forgo licensing and management fees from Euro Disney for five years. For another five years beyond that, the parent company will receive licensing fees at 50% of the contractual rate and management fees at 1% of revenue.

Walt Disney also will buy $245 million worth of assets from Euro Disney and lease them back on favorable terms.

The banks, meanwhile, have agreed to abandon claims on $280 million in interest payments and defer payments on loan principal for three years.