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The Walt Disney Co. to refinance debt with 1,3 billion EUR

Author Topic: The Walt Disney Co. to refinance debt with 1,3 billion EUR  (Read 6821 times)

Kristof

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The Walt Disney Co. to refinance debt with 1,3 billion EUR
« on: September 18, 2012, 07:03:27 PM »
The official press release:

Quote
(Marne-la-Vallée, on 18 September 2012) - Euro Disney S.C.A., parent company of Euro Disney Associés S.C.A., operator of Disneyland® Paris, announces the refinancing Euro Disney group’s debt (excluding debt already extended by The Walt Disney Company) with new financing provided by The Walt Disney Company and two of its French subsidiaries, for an overall amount of 1,332 million euros.

The workers’ council has been consulted on the transaction and has rendered a favourable opinion thereon. In addition, the consent of all the creditors, necessary to implement the transaction, has been obtained.

The Supervisory Board of Euro Disney Associés S.C.A. met today and approved the transaction.

With this refinancing, the Group's average interest rate on its debt decreases meaningfully and the Group benefits from greater operational flexibility by removing the restrictive covenants under existing debt agreements, notably those related to restrictions on capital expenditures. Moreover, the extended maturity of the total debt to 2030 together with a more gradual debt repayment schedule will better position the Group to invest in long-term growth and drive value for all shareholders. The transaction is expected to close on 27 September 2012.

« This refinancing will enable us to reduce our financing costs and give us greater investment and operational flexibility. This is a key step in the development of our Resort that we pursue for the benefit for all of our stakeholders. I strongly believe this will be highly beneficial to the Company, its cast members and shareholders.», declared Philippe Gas, Chief Executive Officer of Euro Disney S.A.S.

Philippe Gas added: « The Walt Disney Company, with this transaction, reaffirms its continued confidence in Disneyland® Paris which has successfully become, over the past 20 years, the number one tourist destination in Europe, a growth driver of French tourism and an important ambassador of the Disney brand across Europe ».

Source
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Trekkie101

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #1 on: September 18, 2012, 07:16:20 PM »
Quite literally, DLP can now spend money :D
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byron-james

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #2 on: September 18, 2012, 07:18:44 PM »
Is this maybe what was meant by the rumor of the WDC takeover?

Or

Is this a step in that direction?
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Trekkie101

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #3 on: September 18, 2012, 07:23:04 PM »
It puts it all a step closer however this basically means they paid off all/most of the debt to allow DLP to spend, or use its money better. I would say its now unlikely they'll purchase DLP.

Many banks don't see maintenance/magic as important as WDW quite rightly does. Share price should go up a bit tomorrow!
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Josh

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #4 on: September 18, 2012, 07:48:32 PM »
YEEEEEEEEEEESSSSSSSSSSSSSS!!!

Wait. Loan!? I'm a bit confused about how this works, but this is how I understand it: EDSCA will use TWDC to repay all of their debt right away and they will then have a more forgiving debt to repay the loan?

I can't wait to see if they begin to profit in Q1 next year! :D

Quote from: "byron-james"
Is this maybe what was meant by the rumor of the WDC takeover? Or Is this a step in that direction?
Maybe they saw this as a better alternative?

By the way, what's the difference between a stakeholder and a shareholder?
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ICHAPMAN

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #5 on: September 18, 2012, 07:51:51 PM »
Forgive me, but surely all this actually means is that it now will owe the majority of the its debts to TWDC rather than the banks?

I can see that this would mean that the interest rate would be controlled by TWDC and therefore can be lower than normal,  and would provide DLRP would funds to spend (due to not having to pay the larger interest rates etc), but to suggest that are now largely debit free - would be a mistake?.    We now owe TWDC €1.3 Billion (+ withheld royalties etc from past years).

Is that the sum of it?.

Thanks

Iain
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littlemermaid83

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #6 on: September 18, 2012, 08:47:22 PM »
Quote from: "ICHAPMAN"
Forgive me, but surely all this actually means is that it now will owe the majority of the its debts to TWDC rather than the banks?

I can see that this would mean that the interest rate would be controlled by TWDC and therefore can be lower than normal,  and would provide DLRP would funds to spend (due to not having to pay the larger interest rates etc), but to suggest that are now largely debit free - would be a mistake?.    We now owe TWDC €1.3 Billion (+ withheld royalties etc from past years).

Is that the sum of it?.



I think you put it rather well. I still would rather have TWDC buy out DLP.
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Sven_29

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #7 on: September 18, 2012, 08:58:37 PM »
I'm not sure this is positive or negative news, but I really hope the park benefits of this transaction.
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DisneyObsessive

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #8 on: September 18, 2012, 09:23:14 PM »
Quote from: "Josh"
By the way, what's the difference between a stakeholder and a shareholder?

A stakeholder is anyone with an interest in the business Staff (sorry cast members), investors, banks even guests
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andrewuk

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #9 on: September 18, 2012, 09:42:04 PM »
Fantastic news. Mark this day in your diaries! I think and hope that we can expect Star Wars Land and a big WDS placemaking to be announced relatively soon.
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mickeyspal

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #10 on: September 18, 2012, 09:43:32 PM »
This should be good news, Euro Disney will no longer have their hands tied behind their backs with the covenants now lifted, and be able to spend and improve the park for all concerned. :D
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byron-james

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #11 on: September 18, 2012, 09:45:01 PM »
Quote from: "Josh"
By the way, what's the difference between a stakeholder and a shareholder?

A stakeholder has an interest in the company, they usually want the best for it as it benefits them (unless they benefit from the decline of the company - not sure what you'd call that?). Employees rely on it for income, suppliers do the same. Customers may need the company for a product or service it provides - just like I need DLP to be in existence in order to breathe and occupy lots of my time 8)

A shareholder is also a stakeholder cos if the company does well the value of their shares increase.
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DisneyObsessive

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #12 on: September 18, 2012, 09:58:16 PM »
Quote from: "Sven_29"
I'm not sure this is positive or negative news, but I really hope the park benefits of this transaction.

This is good news without question I think.  It means the speed of debt repayment will not cripple the investment plans the park has.  They were due to pay over 400 million in just five years from the press release it would seem that the repayment will now be more even over the years.  

You will also remember we kept hearing how the Rat investment was being held up as they persuaded the banks to allow the business to take on the extra debt needed to pay for it.  I would imagine this change will make that a lot easier for future investments.

I don't know if this make a buy out more or less likely.  Certainly the financial investment need to buy out the shares is a lot less than the 1.3 billion they have just put up.  Based on today's share price I think the total value of the shares is about 266 million euros of which ED SCA already own 40%.  

If one of the motives to buy out the shares was to have more control over the direction of Disneyland Paris I think this move will have do more to achive that outcome.
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Javey74

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #13 on: September 18, 2012, 11:19:58 PM »
I think this should give DLP lots more breathing space with investments and ideas for sure..  ;)

It'll be 'Watch this Space' for share prices, development, investment and imagineering..  ;)  :D

If DLP has to be bought out, better it be someone like TWDC, who shares and lives the magic, unlike the banks..  :roll:
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JelleP

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Re: The Walt Disney Co. to refinance debt with 1,3 billion E
« Reply #14 on: September 19, 2012, 12:33:46 AM »
So... Eehm...
Are all of DLP's debts now payed off or is the 1.3 billion euros just a fraction of it?
Sorry for this (probably) stupid question, but my economic jargon isn't that good, especially in English... :oops:
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