[Tom Morrow]

Disney conceeds on financial details

Disney to Expand Hong Kong Disneyland BusinessWeek It looks like the Walt Disney Company (DIS) and the Hong Kong government have finally reached an agreement to expand their undersized and underperforming Hong Kong version of the Magic Kingdom. Though its joint venture, Hong Kong Disneyland declined to comment about ongoing discussions, Reuters reports an announcement is expected by early next week. On the face of things it looks like an important breakthrough for Disney, which in March announced it was sacking 30 Hong Kong-based “Imagineers” because discussions with the Hong Kong government, which currently owns 57% of the park, were going nowhere. However it appears as though Disney ended up making all the concessions. According to press reports, Disney will pay for the entire expansion costing as much as $800 million. The government will convert its debt to equity to prevent its share from being diluted below the 50% mark. The Hong Kong government, quite rightly, was reluctant to pony up any more cash into the money-losing park considered too small to attract enough first time visitors, let alone getting them to come back. Although Hong Kong covered more than 80% of the initial $2.9 billion cost of the project, the government has just a 57% share in the joint venture, with Disney holding the other 43%. by Frederik Balfour complete article

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