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Disney, Hong Kong reach $465m expansion deal
(Agencies)
Updated: 2009-06-30 14:28 The Walt Disney Co and Hong Kong's government have reached a deal to expand the territory's Disneyland theme park at a cost of about $465 million, officials announced Tuesday. The deal, in the works over the last two years, is part of an effort to boost the fortunes of the theme park after it failed to attract as many visitors as hoped after its opening in 2005.
"The expansion will be a catalyst to the park's long-term development and bring benefits to not just the local tourism industry but also the entire economy," Rita Lau, Hong Kong's commerce and economic development secretary, told reporters. Under terms of the deal, the Burbank, California-based entertainment giant will contribute all the necessary new capital for construction as well as sustaining the park's operation during the building phases. It will also convert into equity about $350 million in loans to the venture to help with funding and will keep open a credit facility of about $40 million. Hong Kong, which shouldered much of the $3.5 billion original construction cost, will not add any new capital, the government said. "Disney is making a substantial investment in this important project," Leslie Goodman, a Disney vice president, said in a statement. The park came under fire after disappointing attendance in its first two years of operation. But traffic in its third year grew 8 percent, according to figures provided by the Hong Kong government. |
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