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Euro Disney auditors report to the banks

John Murray
Monday 21 February 1994 19:02 EST
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EURO DISNEY, the troubled French amusement park, moved a step closer to a refinancing yesterday after KPMG, the accountancy firm, completed a report for the 63 bank lenders to the project.

Negotiations between the banks and Walt Disney of the United States, which owns 49 per cent, will now begin in earnest.

The theme park near Paris faces possible closure next month unless a deal can be hammered out. Earlier this month, the bankers and Walt Disney agreed that Euro Disney needed another Fr12bn ( pounds 1.38bn) to survive. But there has been disagreement about how the money is to be raised, with Disney insisting that the banks put up at least half.

Euro Disney has already accumulated debts of Fr20.3bn. The banks have also complained about the management fees and royalties charged by the American parent for the franchise.

The company lost Fr5.3bn in the year to last September and another Fr553m in the three months to December.

But the KPMG report is understood to be broadly sympathetic to the new business plan produced by Philippe Bourguignon, who took over as chairman last year.

However, it is believed not to contain a definite recommendation to the banks on whether to lend the company more money.

Mr Bourguignon's new strategy includes tighter control of costs, wider marketing and more flexible pricing. It is believed to have brought Euro Disney positive cash flow.

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