Case Study: The Euro Disneyland Project

소개글

Project sponsors need to address two basic questions early in the planning stages for a project:
1. Should one or more separate legal entities be established to fi-nance, construct, own, and operate the project, and if so, how should each be organized?
2. What credit sup port arrangements will have to be put in place in order`foattract the required capital?
The Euro Disneyland Case Study illustrates how one major corporatiofl addressed these issues, how financially restructuring a project can real-locate risk to other project participants and away from the original spon-sor, and how the sponsor can derive benefits from this risk reallocation.
1. INTRODUCTION

목차

1. INTRODUCTION
2. PROJECT DESCRIPTION
3. DISNEY
4. PROJECT OWNERSHIP STRUCTURE

본문내용

1. Should one or more separate legal entities be established to fi-nance, construct, own, and operate the project, and if so, how should each be organized?
2. What credit sup port arrangements will have to be put in place in order’foattract the required capital?
The Euro Disneyland Case Study illustrates how one major corporatiofl addressed these issues, how financially restructuring a project can real-locate risk to other project participants and away from the original spon-sor, and how the sponsor can derive benefits from this risk reallocation.

1. INTRODUCTION
Euro Disneyland would introduce to Europe a theme park and resort concept that The Walt Disney Company (“Disney”) had developed and seemingly perfected—in the United States and Japan over the preceding 35 years. The first phase of the project (the “Euro Disneyland Project”) has been completed other stages are scheduled to be completed through 2011.
The complex financing structure Disney devised for the Euro Disneyland Project ultimately proved to be too highly leveraged. The high leverage created significant financial risk for a company that turned out to have relatively high operating risk. The financial success of the project depended importantly on the project entity’s being able to develop and sell substantial real estate holdings at a significant profit in order to generate cash to pay down debt to a sustainable level. However, the real estate boom in France ended abruptly— principally because of a severe recession in Europe and an increase in interest rates.

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