Euro Disney loses its finance director as restructuring ends

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The Independent Online
EURO Disney has lost its finance director, Michael Montgomery, just as it was completing the final phase of its mammoth financial restructuring.

His decision came out of the blue. A former treasurer of Walt Disney, Euro Disney's parent, he was one of a number of senior staff drafted into the French company when it ran into serious difficulties in April last year. He won the respect of those involved for the way he handled the complex negotiations.

No reason for his resignation was given, but he was rumoured to dislike the idea of working for a company that is in effect run by its banks. He will be replaced by his deputy, Xavier de Mezerac, who joined Euro Disney at the same time last year.

The news came as the Paris theme park confirmed it had triggered the final stage of its complex restructuring with the repayment of Fr5.8bn ( pounds 725m) to its bankers. The lump sum, paid over in one go on Friday, represents almost all the proceeds from its recent rights issue. The move cuts total debt to Fr16bn and bank debt, now rescheduled, to about Fr12bn.

The repayment followed a deal hammered out with its bankers in March under which they agreed to waive Fr1.6bn of interest payments plus debt-payment deferrals for three years if Walt Disney waived certain management and royalty fees. Euro Disney then launched a long-awaited Fr5.95bn rights issue.

Under the plan, Euro Disney will also receive Fr1bn in cash through the issue to Walt Disney of bonds redeemable in shares and benefit from the sale of assets for an estimated Fr1.4bn. The remaining bank debt of about Fr12bn is subject to rescheduled payments.

Euro Disney said the full effect of the restructuring would not be felt until its 1995 financial year.

It said that in 1995 interest-payment reductions would cut Fr600m from its costs, while royalty savings would amount to Fr260m and management fee savings to Fr145m.

The shares trade at more than Fr10 each, although analysts like Nigel Reed of the brokers Paribas estimate they are worth only about Fr8.