Saudi Prince Helps Out Euro Disney

Saudi Prince Alwaleed bin Talal is once again lending a helping hand to Walt Disney Co.

The Saudi billionaire, who helped bail out Euro Disney during its last financial crisis in 1994, has agreed to buy $33 million in new shares in the struggling French theme park operator, the company said.

The amount represents about 10% of the $330 million in stock that is being offered as part of a financial restructuring of Euro Disney, which has been trying to stave off bankruptcy protection.

The company, which operates two Disney parks outside of Paris, obtained approval to issue new shares last month as part of an agreement with its creditors to avoid defaulting on $2.7 billion in debt.

Euro Disney’s financial losses deepened after it opened a second theme park in 2002 that failed to draw the anticipated crowds.

Even with his purchase of additional stock, Alwaleed’s overall stake in Euro Disney will be reduced from 16% to as little as 10% because of the new shares being issued.

Nonetheless, his purchase comes at a critical time for Euro Disney and analysts expect it to spur others to buy new shares in the company. Alwaleed, the second-largest shareholder, has already suffered heavy losses from his original investment in Euro Disney.

“Prince Alwaleed is supportive of the management of Euro Disney and will contribute in a significant manner to the upcoming capital increase,” Perley Shoucair, the prince’s investment advisor, told Bloomberg News.

Investors responded favorably to the news. Euro Disney shares, which have lost a third of their value in the last year, rose 4 cents to 29 cents in Paris.

For its part, Burbank-based Walt Disney Co. will maintain its holding in Euro Disney by buying $132 million in new shares. Disney owns 40% of the company.

The share sale must be held before the end of March but is expected to occur sooner.