Shares in 'dreadful' Euro Disney tumble

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The Independent Online
EURO DISNEY'S shares fell 43p to 330p yesterday after Michael Eisner, Walt Disney's chairman, said the European associate's performance had been 'dreadful'.

The shares partially recovered to close at 358p. Mr Eisner's attack, which appeared in Walt Disney's annual report published yesterday, was seen as tough talk in the pounds 2.3bn poker game to refinance Euro Disney.

However, in Paris, where the shares fell heavily earlier in the week due to investors' complaints over the company's accountancy policy, Euro Disney gained Fr2.85 to Fr31.90.

Mr Eisner called Euro Disney 'our first real financial disappointment. We are weighing all the options for the project.

'Some would call it dreadful, and in a financial sense I would be forced to agree,' Mr Eisner said in a letter to shareholders contained in the annual report.

Euro Disney admitted in November that it would be forced to close without a refinancing. It revealed a Fr5.3bn loss for 1993 in November, including exceptional write-offs of Fr3.6bn. Its 60 banks, led by Banque National de Paris, are locked in refinancing talks with Walt Disney, which owns 49 per cent of the development.

'BNP doesn't want to react to Mr Eisner,' said a spokeswoman yesterday. 'This is not the moment to express ourselves.'

Walt Disney has put a March deadline on the talks, just two years after the opening of the theme park 20 miles east of Paris.

Mr Eisner told shareholders: 'We cannot shoulder the entire burden ourselves; other parties must bear their fair share.'

Accountants from KPMG's corporate recovery department were commissioned 10 days ago by the banks to compile a report on Euro Disney's viability. The BNP spokeswoman said the banks' report would be completed in mid-January, and at that time 'the banks will make their decision on the restructuring'.

Mr Eisner's comments were described as 'poker-playing' by accountancy sources and analysts yesterday. Nigel Reed, of Banque Paribas in London, said Mr Eisner was just restating his position: 'It's been a financial disaster, Disney may walk away after March unless there is a satisfactory refinancing, and Mr Eisner wanted to reassure Disney's shareholders that they wouldn't suffer.'

The restructuring talks are expected to include some combination of cost-cutting, new money from Disney and a refinancing of bank debts. The banks may be forced to turn some of their loans into shares, which would dilute the value of shares already on the market. That, in turn, has caused Euro Disney share prices to see-saw in recent weeks.