Has anyone else been concerned by the information below:
http://www.france24.com/en/20141003-eurodisney-hold-special-meeting-cash-crunch-sources/?aef_campaign_date=2014-10-03&aef_campaign_ref=partage_aef&ns_campaign=reseaux_sociaux&ns_linkname=editorial&ns_mchannel=social&ns_source=twitter
Apparently a meeting has been called with workers councils in France concerning the company's cash flow. As anyone with reasonable financial knowledge will know, inadequate cash flow spells disaster.
The question is would Disney allow it to fail, I would it bail it out again?
Read it Friday and was shocked but not surprised.
I am shocked too to hear about this...maybe if they made it cheaper more familys could go and visit the magic of disney.. :)
There are rumours that TWDC might completely or partially take over. Monday is a few hours away, we'll just have to wait and see.
msRavenswood mentioned this a rumour, so what would happen?
Quote from: DisneyManiac on October 05, 2014, 06:01:49 PM
msRavenswood mentioned this a rumour, so what would happen?
Given that Disneyland Paris currently employs over 15,000 staff (heard it from my Tour guide during my last visit), I assume a big round of restructuring. Staff is going to be a very big chunk of the fixed cost of the park, so reducing that will give a lot of gains over a relatively short period of time.
After that, probably investing money to get the quality of the parks up (perceived or otherwise), to draw more guests.
Don't count on any drops in price, if anything, expect them to go up.
There's a big discussion taking place on Twitter and Facebook at the moment with various rumours flying around. I think we should stay optimistic and try not to lose our heads.
Can Burbank take full control? I thought they were prevented from owning a majority, or have the French laws been softened in that regard?
And time is of the essence, would the EU Competition Commission have to get involved? I don't want some drawn out process to loom over the resort.
Fingers crossed for a positive outcome tomorrow.
As others have said, a restructuring would be the first point of order. Don't expect them to be green lighting refurbs and new attractions hand over fist.
You've got to right the ship before setting course.
Quote from: Rocketeer on October 05, 2014, 06:40:54 PM
Can Burbank take full control? I thought they were prevented from owning a majority, or have the French laws been softened in that regard?
And time is of the essence, would the EU Competition Commission have to get involved? I don't want some drawn out process to loom over the resort.
Fingers crossed for a positive outcome tomorrow.
That's what some have been debating. Perhaps TWDC can't take total control because of French laws being in the way. Who knows, maybe they will partially take over or something that doesn't cross our minds will eventually happen.
I guess it depends on just how much stock they can own. Even if its the maximum allowed under the law then it'd be all for the better.
Whatever it takes to save the resort and move it forward, it has to be done.
Quote from: Rocketeer on October 05, 2014, 06:53:27 PM
Whatever it takes to save the resort and move it forward, it has to be done.
Agreed!
After all its in TWDC best interest that this resort flourishes.
Quote from: msRavenswood on October 05, 2014, 06:32:51 PM
There's a big discussion taking place on Twitter and Facebook at the moment with various rumours flying around. I think we should stay optimistic and try not to lose our heads.
Yeah noticed that, alotta buzz is going on...
http://disneyandmore.blogspot.ie/2014/10/dlp-announced-emergency-meeting-for.html?m=1
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? ;)
http://corporate.disneylandparis.fr/CORP/FR/Neutral/Images/fr-2014-10-06-Projet-de-Recapitalisation-Euro-Disney.pdf
Here's the press release:
Overall rationaleThe proposal is designed to improve the financial position of Euro Disney and enable it to continue investing in the guest experience.
Context of the operationChallenging 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 involvedEuro 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 milestonesAfter 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/ (http://timon.disneylandparis.com/corporate/en/)
You can discuss the announcement regarding the recapitalization in its own topic here (https://forum.dlpguide.com/index.php?topic=17879.0). :)
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.
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.
I have 101 shares already but at €1 a share I don't think I can resist buying more. 👍
Further investment is great, but jeakat pointed out, will this fix some of the maintenance issues?
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.
I suppose that is a good thing. I don't know, I just expected more. Although €1bn isn't anything to be sneezed at.
I think this is good news and I look forward to the further details in the first quarter of 2015.
Quote from: cazspence on October 06, 2014, 09:07:56 AM
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."
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?
Here's a video of Mark Stead explaining Euro Disney's recapitalization.
http://www.youtube.com/watch?v=WrV1KvQJDWE
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.
If this is such good news? Why is the share price dropping?
Does anyone know what ever happened to that petition to Bob Iger last year?
Quote from: txgrl on October 06, 2014, 10:45:07 AM
If this is such good news? Why is the share price dropping?
Does anyone know what ever happened to that petition to Bob Iger last year?
Maybe existing shareholders aren't going to invest more at 3.50 a share if they can wait a few months and get them for 1.25 a share?
The offer of €1 a share is only if you are a current share holder, and you must buy them and a ratio of 9:1. Meaning as I have 101 shares I would have to buy 909 shares costing €909 or none at all.
Quote from: cazspence on October 06, 2014, 12:29:54 PM
The offer of €1 a share is only if you are a current share holder, and you must buy them and a ratio of 9:1. Meaning as I have 101 shares I would have to buy 909 shares costing €909 or none at all.
Ah, I thought there'd be a catch! I thought it might be that they would limit your buying to the same number of shares that you currently held. Instead, I think they've put buying additional shares out of most people's reach, especially as the investment just sits there and doesn't pay a dividend.
What does the mention of shares for €1.25 mean?
Where did you find the information?
Quote from: A&S&O on October 06, 2014, 12:47:50 PM
Quote from: cazspence on October 06, 2014, 12:29:54 PM
The offer of €1 a share is only if you are a current share holder, and you must buy them and a ratio of 9:1. Meaning as I have 101 shares I would have to buy 909 shares costing €909 or none at all.
Ah, I thought there'd be a catch! I thought it might be that they would limit your buying to the same number of shares that you currently held. Instead, I think they've put buying additional shares out of most people's reach, especially as the investment just sits there and doesn't pay a dividend.
What does the mention of shares for €1.25 mean?
Where did you find the information?
The information is all on the corporate website.
http://timon.disneylandparis.com/corporate/en/
The €1.25 a share is what TWDC will buy them back for .
Quote from: cazspence on October 06, 2014, 12:29:54 PM
The offer of €1 a share is only if you are a current share holder, and you must buy them and a ratio of 9:1. Meaning as I have 101 shares I would have to buy 909 shares costing €909 or none at all.
You can buy up to 909 shares (but you can buy less); Disney will buy any shares that existing shareholders don't subscribe to.
If I understand the next part right, though, you'll be able to sell all your actions back to Disney (including the ones you had before) at the guaranteed price of 1.25 - or you can keep any actions you have for yourself.
So say you have 101 shares, which cost 3.5 EUR each (if you're lucky... if they were worth more you're already losing out). Their total value is
101*3.5 = 353.5 EUR
You buy the new shares at 1 EUR
909*1 = 909 EUR
And have spent 353.5 + 909 = 1262.50 EUR for your 1010 shares.
If you then sell them back to Disney, you'll get 1.25 per share ie 1010 * 1.25 = 1262.50 EUR (ie you get all your money back)
Or you could just sell the additional 909 shares you bought at 1 EUR, and make 0.25 EUR profit per share.
If you don't buy any new shares, and decide to sell your 'old' shares, you'll be losing 2.25 EUR per share (3.5 - 1.25) - ie for your 101 shares, you'll get back 126.25 EUR (instead of the 353.50 they cost you).
If you decide to keep your shares, and do nothing (buy no new ones nor sell them), the value of your shares will probably go down. If value stays around the 1.25 / 1.50 EUR per share, you'll have lost about 2 EUR per share. Buying some new shares at 1 EUR and selling them a bit later at 1.25 EUR allows you at least to make some of that money back...
Should I buy shares now then. Shares now up at 3.17.
I would like a piece of the magic and the perks are nice. Or should I wait for the shareholders agm
Quote from: A&S&O on October 06, 2014, 10:34:41 AM
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?
I believe it was €1.7bn, but that has now been reduced down to €1bn.... still an eye watering amount of debt.
I'm not entirely sure on how much profit the make each year, but I'm willing to guess that it'll still take a decade or more to pay off the amount.
If you'd asked that question at 9am, I'd have said definately buy. Now however, its anyone's guess what will happen to the share price.
Are you already a shareholder? The €1 share offer is only open to current shareholders.
No we have been talking about for awhile and wanted to do it before out next trip in Feb.
Really wish I'd free around 11am to get myself some shares ::) Oh well, the shareholders club probably wouldn't pay for me (though a trip to Salon Mickey would be nice)
Quote from: DisneyRon on October 05, 2014, 06:06:03 PM
Quote from: DisneyManiac on October 05, 2014, 06:01:49 PM
msRavenswood mentioned this a rumour, so what would happen?
Given that Disneyland Paris currently employs over 15,000 staff (heard it from my Tour guide during my last visit), I assume a big round of restructuring. Staff is going to be a very big chunk of the fixed cost of the park, so reducing that will give a lot of gains over a relatively short period of time.
After that, probably investing money to get the quality of the parks up (perceived or otherwise), to draw more guests.
Don't count on any drops in price, if anything, expect them to go up.
But is it not true that they have to employ that number of people due to French employment laws - especially the maximum working week law?
If its cash flow, then I wonder if there will have to be emergency cost saving measures implemented?
Time to close a hotel again - especially as occupancy has apparently dropped significantly recently?
I see a few media outlets are suggested that this new agreement is a further step towards the Mouse taking over ED SCA.
Surely if they were going to do that, they could have done it on Monday, or are they waiting for something like a new fiscal year?
Such things are not that simple. You can see it as a chess game.
It is insanely complicated, but one of the issues is of a foreign company taking ownership of a french company. The French government operate a protectionist agenda and can sometimes get narky about it.
Although Disney is American, the french have vetoed US takeovers of other companies (Pfizer) and would need to be consistent to be able to continue this!
Funny though, as I doubt there'd be much opposition to TWDC taking over a company (theme park) that is already perceived to be American. i.e. Would there be much compliant that ED SCA would no longer French owned?
No, but how can they then justify future objections to other takeovers?
Does anyone know when this 1 euro deal is going to be available to buy? I have a sneaky feeling that in response to this drop in price they will up the minimum holding again for membership to the shareholders club.
Quote from: Slimy yet satisfying on October 08, 2014, 09:21:47 AM
Does anyone know when this 1 euro deal is going to be available to buy? I have a sneaky feeling that in response to this drop in price they will up the minimum holding again for membership to the shareholders club.
Hopefully conditions wont change for existing shareholders. They already have something similar, if you owned shares before a particular date you need less shares to qualify (I forget the details but they're in the small print of their conditions). In any case, so far that's what they've said, that current members wont be impacted.
And the rights subscription will be sometime next year, they still need to get it approved by the works council and the shareholders (they will call for an extraordinary shareholders meeting)
Quote from: Slimy yet satisfying on October 08, 2014, 09:21:47 AM
Does anyone know when this 1 euro deal is going to be available to buy? I have a sneaky feeling that in response to this drop in price they will up the minimum holding again for membership to the shareholders club.
They have said on the corporate site that nothing will change for current members, but they may have new regulations for new joining members.
There were some interesting quotes from senior Euro Disney figures past and present in the Guardian article reporting this news.
Mark Stead, Chief Financial Officer:
"We need to get away from tired-looking assets and make them look new," Stead said. "We need to be ready for the 25th anniversary in 2017."
He said the park would bring in more Disney characters and trademarks, although new blockbuster rides were unlikely. [...]
Stead said: "We will be revamping attractions, bringing in new ride technology [and] new ride experiences. The look and feel will completely change. We hope to take technology from US parks and bring it here. We wanted to [do that in the past] and we needed to do that, but we haven't had the financial flexibility to do so."
Meanwhile, from Pierre-Yves Gerbeau, former VP Operations:
"They've been running that place since we left pretty much on autopilot. You walk around and it hasn't been maintained properly, it looks outdated and tatty. It needs a proper shakeup both in leadership and strategy," he said.
"The customers are more sophisticated, more focused on how to spend their money and their time and [management] haven't kept up with that. Every other service business has reinvented itself to attract more customers. That theme park hasn't."
• DLP Today — Press review: Euro Disney's €1bn recapitalisation in news articles and quotes (http://www.dlptoday.com/2014/10/07/press-review-euro-disneys-e1bn-recapitalisation-in-news-articles-and-quotes/)
Wow strong words from PY.... he's right though.
Quote from: Slimy yet satisfying on October 08, 2014, 09:21:47 AM
Does anyone know when this 1 euro deal is going to be available to buy? I have a sneaky feeling that in response to this drop in price they will up the minimum holding again for membership to the shareholders club.
Does anybody know how many Shareholders Club members there are currently? I had been expecting Salon Mickey to become quieter 2 years after the 100 share rule was brought in, but now I'm not sure!
So how many Shareholders on here will be voting in favour of this proposal from TWDC?
there is one mistake here. The recapitalization is not of 1 Billion, but 1000 million (1.000.000.000). This is called 1 milliard.
1 billion is a million of millions (1.000.000.000.000)
Quote from: Aladar on October 10, 2014, 02:18:56 PM
there is one mistake here. The recapitalization is not of 1 Billion, but 1000 million (1.000.000.000). This is called 1 milliard.
1 billion is a million of millions (1.000.000.000.000)
http://en.wikipedia.org/wiki/Billion
http://en.wikipedia.org/wiki/1,000,000,000
Quote from: Aladar on October 10, 2014, 02:18:56 PM
there is one mistake here. The recapitalization is not of 1 Billion, but 1000 million (1.000.000.000). This is called 1 milliard.
1 billion is a million of millions (1.000.000.000.000)
not exactly, there's this silly thing where there are 2 definitions of a billion, guess which one the Americans use. ;)
So a Billion in this is case is €1,000,000,000 most of the English speaking world uses it like that.
Not the €1,000,000,000,000 it would be if you literally translated it into many other languages. ;D
That just a million? 1,000,000 a billion is 1,000,000,000
Quote from: cazspence on October 10, 2014, 03:36:44 PM
That just a million? 1,000,000 a billion is 1,000,000,000
yeah, my apologies, forgot to add a set of 3 zeros. ;)
No matter which way you look at it, its a shed load of money.
Quote from: Rocketeer on October 10, 2014, 08:07:25 PM
No matter which way you look at it, its a shed load of money.
But not to Disney. Presumably they could easily (financially) pay off DLP's debts, meaning profit would be profit, rather than turning into debt because they are servicing such a big loan.
I guess the point is, as a few people have mentioned, the French government would like that to happen as it would effectively be a take over.
While we're on the subject of it being a French owned company, how much is actually owned by the French? Around 40% is owned by Disney, 10% owned by the Prince, a very, very small percentage owned by me(!), that takes it over 50% foreign owned.
Also, can anyone work out what percentage of Euro Disney is owned by someone who owns 100 shares?
Quote from: DisneyRon on October 10, 2014, 03:18:03 PM
not exactly, there's this silly thing where there are 2 definitions of a billion, guess which one the Americans use. ;)
So a Billion in this is case is €1,000,000,000 most of the English speaking world uses it like that.
Not the €1,000,000,000,000 it would be if you literally translated it into many other languages. ;D
Then it's a worldwide cultural mistake ;D
Prince Alwaleed is accepting the deal:
http://www.thisismoney.co.uk/money/news/article-2789259/saudi-prince-joins-330million-deal-save-france-s-euro-disney.html
It is not a French owned company, it is a company incorporated under French law.
APPAED, the Association of Small Euro Disney Shareholders announced yesterday that they have decided to vote AGAINST the TWDC Recapitalization proposal at the AGM on the 13 Jan 2015.
They are advising their members to vote No to resolutions 1, 2, 3, 11, 12, 13 and 14. And to either vote No or Abstain on resolutions 4, 5, 6, 7, 8, 9, 10, 15.
This decision by APPEAD may not prevent the recapitalization project being approved as the association does not have the majority of the votes. But it is a way for the association and their members to express dissatisfaction with the proposal.