Home

[msRavenswood]

Euro Disney S.C.A. announced a €1 Billion recapitalization today to improve their financial situation. This financing by The Walt Disney Company allows Euro Disney to reduce its debt and continue to invest in better experiences.

Now that's news to start our day, isn't it? 

[ford prefect]

http://corporate.disneylandparis.fr/CORP/FR/Neutral/Images/fr-2014-10-06-Projet-de-Recapitalisation-Euro-Disney.pdf

[Kristof]

Here's the press release:

Overall rationale
The proposal is designed to improve the financial position of Euro Disney and enable it to continue investing in the guest experience.

Context of the operation
Challenging economic conditions in Europe coupled with Euro Disney's debt burden have negatively impacted its financial performance.  Due to these factors, Euro Disney has been constrained in its ability to make investments in Disneyland Paris

Details of the proposal

• Cash infusion of approximately 420 million euros, made or guaranteed by Disney through capital increases of Euro Disney S.C.A. and of its principal operating subsidiary;
• Conversion of 600 million euros of part of the debt owed to Disney into equity of Euro Disney S.C.A. and of its principal operating subsidiary;
• Deferral of all amortization payments of loans granted by Disney until revised maturity in 2024 (currently 2028); and
• Consolidation of the existing lines of credit granted by Disney maturing in 2014 (which has been already extended by Disney to 2015), 2017 and 2018 into a single 350 million euros revolving credit facility maturing in 2023

Objectives of the proposal

• Improve the cash position of the Euro Disney Group by approximately 250 million euros;
• Reduce the Euro Disney Group's indebtedness, currently exclusively owed to Disney, from 1,748 million euros to 998 million euros, reducing its net leverage ratio from approximately 15x to 6x;
• Improve the Euro Disney Group's liquidity through interest savings and deferral of amortization of loans until final repayment in 2024.

Parties involved
Euro Disney S.C.A. shareholders would have an opportunity to participate in the capital increases of Euro Disney S.C.A. alongside with Disney, at the same price.
As a result of the contemplated capital increases of Euro Disney S.C.A. and in accordance with applicable regulations, Disney would be required to launch a tender offer on Euro Disney S.C.A. shares.
Euro Disney S.C.A.'s Supervisory Board has expressed unanimous support for this proposal.

Indicative Timing of the operation and milestones
After the information and consultation of the Workers' Council and the Shareholders' approval during the general meeting of ED S.C.A.'s shareholders early 2015, the transactions contemplated by the proposal are expected to be completed in the first semester of calendar 2015.

Source: http://timon.disneylandparis.com/corporate/en/

[Kristof]

You can discuss the announcement regarding the recapitalization in its own topic here. 

[txgrl]

As a shareholder, I received an e-mail but don't understand. Does anybody know that this means? Are my shares now worth 1 euro? Or can I invest extra at a small price?

Dear Shareholder,


The Shareholders Club informs you:

Letter to the Members of the Shareholders Club



Marne-la-Vallée, October 6, 2014

Euro Disney announced today a 1 billion euro recapitalization, backed by The Walt Disney Company ("TWDC"), aimed at significantly bolstering Euro Disney's financial position and enabling it to continue investing in the destination, better positioning the company for long-term success.

Despite continued investment in the resort, challenging economic conditions in Europe have negatively impacted financial performance, and constrained Euro Disney Group's ongoing ability to make investments while supporting its debt burden.

The contemplated transaction encompasses several components. First, there would be an injection of approximately 420 million euros via capital increases in Euro Disney S.C.A and its principal subsidiary. Second, there would be a significant reduction of the Group's indebtedness through the conversion of 600 million euros of the debt owed to TWDC into equity of Euro Disney S.C.A. and its principal subsidiary. Lastly, there would be an improvement of the Group's liquidity via the deferral of amortization of loans until final repayment in 2024.

As a Euro Disney S.C.A. shareholder, you would have the opportunity to participate in the capital increases of Euro Disney S.C.A, alongside our main Shareholder, TWDC, on equal financial terms:

You would have the opportunity to participate along with TWDC in a 351 million euro rights offering by Euro Disney S.C.A. at a subscription price of 1.00 euro per share; and
You would have the right to acquire your pro rata portion of the shares in Euro Disney S.C.A. subscribed to by TWDC through its conversion of debt at a price of 1.25 euro per share, i.e., the price paid by TWDC to subscribe such shares.
You would also have the option to sell your shares to TWDC after the completion of the capital increases of Euro Disney S .C.A. through a mandatory tender offer required by French law and regulations. The proposal is made by TWDC on the basis of a mandatory tender price of 1.25 euro per share.

A more detailed description of the Disney proposal and the conditions which must be met for it to be implemented can be found under "Details of the Proposal" of the press release.

If implemented, this operation would mark an important financial milestone for Euro Disney. This new financial foundation would enable us to pursue our investment strategy and better position the Resort for a potential return to growth in Europe.

As newly appointed Président of Euro Disney S.A.S., I am delighted to return to Disneyland® Paris after having been part of the Resort's Grand Opening team in 1992 to lead the group in the implementation of its long-term development strategy. The management team and I are very excited about this transaction, and we sincerely hope you will continue to take an active role in this new era for Disneyland Paris.



Tom Wolber,

Président Euro Disney S.A.S.

[jeakat24]

I'm sure your existing shares are still worth their market value, you're just being offered additional shares at a reduced price. One not available to non-shareholders 

I'm pretty pleased with the news, though I'm curious to see when it trickles down so that we either see a difference in the parks (maintenance, etc) or when we get an announcement of new improvements.

[cazspence]

I have 101 shares already but at €1 a share I don't think I can resist buying more. 👍

[Rocketeer]

Further investment is great, but jeakat pointed out, will this fix some of the maintenance issues?

[*TIMMIE*]

They already were working on the maintanance issues. They speeded up the velocity of rehabs. I think this means a more healthy financial balance, and they will be able to fund more like entertainment and maintance. Besides I believe this means they can do the upgrades, which a rumoured past months.

[Rocketeer]

I suppose that is a good thing. I don't know, I just expected more. Although €1bn isn't anything to be sneezed at.

[mnewcourt]

I think this is good news and I look forward to the further details in the first quarter of 2015.

[A&S&O]

I have 101 shares already but at €1 a share I don't think I can resist buying more.

This sounds very interesting, but I'd like to know more - can anyone offer any more information?

I think I'm reading that there's a limit to how many shares you can buy at this price, linked to the amount you already hold, but I can't find exact details anywhere. There is also a figure of 1.25 eusros per share mentioned.

"You would have the opportunity to participate along with TWDC in a 351 million euro rights offering by Euro Disney S.C.A. at a subscription price of 1.00 euro per share; and
You would have the right to acquire your pro rata portion of the shares in Euro Disney S.C.A. subscribed to by TWDC through its conversion of debt at a price of 1.25 euro per share, i.e., the price paid by TWDC to subscribe such shares."

[A&S&O]

It's probably been mentioned before, but I'm sorry I can't find it.

How big is the debt that DLP has? They use the profits each year to service the debt, but how long would it take to pay off the debt?

[Kristof]

Here's a video of Mark Stead explaining Euro Disney's recapitalization.

http://www.youtube.com/watch?v=WrV1KvQJDWE

[A&S&O]

Share price just bombed by 20%, down to about 2.73.

A good time for new investors to buy thier 100 shares to become members of the shareholders club.