Disney (DIS), Hong Kong Agree to Deal on Theme Park Expansion
Disney (NYSE: DIS) and the government of Hong Kong have finally reached an agreement to expand the Hong Kong Disneyland theme park, a debate which has become increasingly vital as the global economy continues to slow. Sources have indicated that Disney will inject about $795 million into the joint venture, with about $449 million of that being spent directly on expanding the theme park.
On the other side of deal, the Hong Kong government said it won't invest any further capital into the venture, but will likely convert a large amount of existing loans to the park into equity. The move will cushion its majority stake, which will fall from 57% to 52%.
So far, expansion plans for the park include the addition of three new themed lands, bringing the grand total to seven parks by the time the project is completed. Hong Kong's Secretary for Commerce and Economic Development, Rita Lau, said the project is expected to be completed in several phases over the next five years.
Shares of Disney are trading about 0.4% higher in this morning's pre-market session.
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