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Disneyland Paris Castle Show

Looks like I will get to take that Disneyland Paris vacation after all. No one seriously expected the Walt Disney Company (or France for that matter) to let the park close. With around 15,000 employees and 15 million yearly visitors, it’s a huge boost to the French economy. In addition to a black-eye for Disney, a closure would spell bad things for an economy, which is, admittedly, at the beginning of a delicate recovery. That just wasn’t going to happen.

The park debt, much of it the result of building too many hotels when the park opened, has been an albatross around the resorts neck since its beginning. Multiple refinancings and capital investment have floated the park through restructurings that the company hoped would finally put it in the black.

Early this morning, Euro Disney SAS, the parent company of Disneyland Paris, sent out a letter to its shareholders announcing yet another debt restructuring and capital investment. They also released this oddly optimistic explanation from Mark Stead, SVP and CFO of Euro Disney:

Yes, that’s a $1.25 billion recapitalization of the company (think of it as a mini-bankruptcy, we’re increasing the number of shares, which makes your shares worth less, but less is better than none, which would result in a full bankruptcy).

The details were outlined in a letter sent to Shareholders from the recently appointed President of Euro Disney SAS Tom Wolber:

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Update: the other shoe dropped for Disneyland Paris, the good news? It was a glass slipper from TWDC: http://bit.ly/1xVukOG

What is going on at Disneyland Paris? It’s the most popular theme park in Europe in terms of attendance, but it continually struggles with profitability. This year has been particularly rough. It lost its president Phillipe Gas to Shanghai Disneyland, has been in the news for the shoddy condition of many of its attractions, and is down over a million visitors from the previous year. There is no way to put a silver lining on it. The situation is not good.

On the other hand, the park’s second gate recently opened a Ratatouille attraction that has breathed some life into that park, there are rumors of a major Star Wars addition being planned, and it’s having a Halloween Festival that is getting good reviews. All signs that the park is on the right track.

So which is it? Unfortunately, it appears that the storm clouds are gathering for the park. It will be holding a special meeting with the workers’ council on Monday to discus the park’s cash crunch. The meeting is timed for just before the Paris Stock Exchange opens.