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raidermatt
02-21-2007, 06:18 PM
From the Orlando Sentinel:

http://www.orlandosentinel.com/business/orl-disney1007feb10,0,93041.story

Disney may seek new loan for park
Hong Kong Disneyland may need to refinance debt unless its revenue and attendance improve.

Ting Ting Ng and Joshua Fellman | Bloomberg News
Posted February 10, 2007

Walt Disney Co., the world's biggest theme-park operator, said its Hong Kong park may need to refinance a $294 million commercial loan unless its performance "significantly" improves.

Attendance and revenue at Disney's only park in China fell in the three months ended Dec. 31 from a year earlier, Disney said in a U.S. Securities and Exchange Commission filing earlier this week, without providing details.

The Hong Kong park drew 5.2 million visitors in the 12 months after it opened on Sept. 12, 2005, fewer than the 5.6 million forecast.

Disney is seeking to rebuild the park's image after complaints it is too small as well as complaints about a ticketing policy that forced it to turn away thousands of visitors during last year's Lunar New Year holiday.

"We are taking a number of steps to meet the challenges we are facing, including reassessing our marketing and sales strategy, addressing seasonality and considering opportunities to expand the park," said Lo Bing-chung, a spokesman for Hong Kong Disneyland. "January alone was better than expected," Lo said.

Hong Kong Disneyland started marketing initiatives and other measures to improve performance, including the introduction of annual passes in September. The park said Nov. 14 that it had sold 10,000 annual passes in less than two months.

Disney owns 43 percent of Hong Kong International Theme Parks Ltd., which owns the facility, and receives franchise and management fees.

Hong Kong's government, which invested $2.2 billion in the project, owns 57 percent of the park.

"The government sees Hong Kong Disneyland as a long-term investment," a Tourism Commission spokeswoman told The Standard of Hong Kong newspaper. "We cannot jump to conclusions from the early poor performance."

Disney said in its filing that because the park's performance failed to meet expectations, it may breach covenants to lenders by failing to meet a Sept. 30 benchmark.

The park is seeking waivers or other modifications to its loan terms, Disney said.

Walt Disney sees the Hong Kong park as a leading example of its effort to expand internationally, The Standard reported. Disney has been hoping to use the Hong Kong experience to gain Chinese government approval for a theme park in Shanghai.

ChrisFL
02-21-2007, 07:35 PM
Hong Kong invested $2.2 Billion and didn't get a full disneyland park or any really unique attractions? wow....thats crazy

raidermatt
02-22-2007, 01:47 AM
Hong Kong invested $2.2 Billion and didn't get a full disneyland park or any really unique attractions? wow....thats crazy

Yeah, its not working out real well for them, is it?

That might be part of what's making the *alleged* talks about a Shanghai park so difficult. Certainly the Chinese government has learned a lesson from this, and Disney might be having second thoughts about its idea that they can get away with 1/2 parks in less affluent parts of the world.