Euro Disney's volatile shares jumped nearly 8 percent on Friday after
the theme park operator said its 253.3 million euro ($330.7 million)
capital increase had been fully subscribed.
The European outpost of the Walt Disney Company said in a statement
that demand for the shares, which will sharply dilute earnings per share
for existing stockholders, exceeded the number on offer by 9 percent.
"Now, our undivided attention turns to the execution of our growth
strategy," Finance Director Jeffrey Speed said.
The capital increase was the last plank in a complex plan designed
to haul the firm back from bankruptcy, and an agreement on its giant
debt restructuring depended upon it.
Chairman Andre Lacroix said the park, the most visited tourist attraction
in Europe, could now begin an "unprecedented, multi-year expansion",
since the proceeds will be used to develop new attractions that aim
to revive stagnant visitor numbers.
"These investments, combined with innovative marketing and sales
strategy, should set the foundation for sustained and profitable growth,"
he added.
By 0913 GMT, Euro Disney shares gained 7.69 percent to 0.14 euro, beating
the DJ Stoxx travel and leisure index that was virtually unchanged at
the time.
The new shares will start trading on February 23, Euro Disney said.
News of the new share issue was initially poorly received by the firm's
long-suffering shareholders, who face a massive earnings dilution because
of it.
According to a Reuters calculation, the capital increase has multiplied
Euro Disney's share capital by 3.5, spelling a huge mechanical reduction
in its profits per share.
However 40 percent shareholder the Walt Disney Co and Saudi prince
Al-Walid Bin Talal both pledged to back the increase, though Al-Walid's
stake will shrink to about 10 percent from 16 percent before.
The subscription price for the offer was set at 0.09 euros a share
-- well below the stock's trading price when the capital increase was
announced.
The process was approved by shareholders in December and stems from
protracted negotations with Euro Disney's creditors to ease the burden
of a 2.053 billion euro debt pile it was no longer able to service.
Lacroix plans to spend 240 million euros to revamp Disneyland Resort
Paris, which consists of the original Magic Kingdom park and the recently
built Walt Disney Studios. He plans to update the ultrapopular Space
Mountain ride and building a stomach-churning "Tower of Terror".
Euro Disney's shares totalled 1,082,680,292 at end-September, and the
company issued 2,814,968,754 more under the terms of the capital increase.
