EuroBusiness Media (EBM): Euro Disney is making a significant announcement today. Mark Stead, welcome. You are Senior Vice-President and CFO of Euro Disney, what is your announcement today?
Mark Stead: Today we are announcing an important financial transaction that is aimed at putting the company on a firmer financial footing. Concretely, it’s a recapitalisation of the company for about €1 billion, that’s composed of three main parts. The first part is share capital increase that aims to bring us in excess of €400 million, a debt equity conversion of about €600 million, and the third part is a re-profiling of our debt over the next 10 years. In fact concretely we’re cancelling the amortisation of our debt until maturity in 2024, which should bring us in excess of €800 million of liquidity over the next 10 years.
EBM: Why are you making this announcement today? Is Euro Disney in trouble?
Mark Stead: No, the company is not in trouble. The company is looking to, in fact, continue to invest in the destination. We’ve been investing a lot of money over the past few years. But given the degradation of the economic environment in Europe, we’re faced with a situation where our debt is becoming more and more of a burden on our financial structure. And this operation aims to fix that by significantly decreasing leverage by over 50% and increasing the company’s cash balances by €250 million and then again deferring a lot of our debt, in fact most of our debt payments over the next 10 years, and bringing in in excess of €800 million of liquidity to the company to continue to invest in our destination.
EBM: What will be the impact of this announcement on your shareholding structure?
Mark Stead: That all really depends on what our shareholders chose to do. This operation, even though we’re a announcing it today, is only really going to be acted on in the beginning of next year – so the first half of 2015. So our shareholders have the time to look at this transaction, to study it and to choose what they exactly want to do. There are a lot of options open to them, being from completely participating in the capital increase of the company to cashing out if they wish. It’s really up to each shareholder to choose how they would like to behave.
EBM: And finally, what message would you address to your retail shareholders who are likely to lose out?
Mark Stead: I can imagine how you could get to that conclusion but in fact by definition a capital increase allows every shareholder to maintain, I would say, the value of their shareholding pre-transaction. So what I would say to all our shareholders is: have a look at the transaction, examine all the documentation which we are giving. This is a great transaction for the company, which will put us on a much firmer financial footing and give us the capacity that we need to really continue to invest in our destination. And I would say to each shareholder, they really need to take their time to explore all options available to them.
EBM: Mark Stead, Senior Vice-President and CFO of Euro Disney, thank-you very much.
Mark Stead: Thank you.
