French Regulators Warn Euro Disney Investors Not to Expect Profit Until ’96

PARIS —  Attendance is still falling at Euro Disneyland, and French stock market regulators issued a rare warning to shareholders Wednesday as park officials forecast more losses.

At an extraordinary meeting where they approved a financial rescue plan, shareholders heard a litany of bad news but were told to expect improvement.

The park, which opened in April, 1992, welcomed 10.5 million visitors in its first year, 500,000 under expectations. In the second year, the figure fell to 9.8 million and is well below that pace now, officials said.

Chairman Philippe Bourguignon said losses for the fiscal year ending Sept. 30 should be lower than last year’s deficit of $900 million. But he offered no firm projections.

The rescue plan centers on a $1-billion rights issue. Euro Disney intends to offer current investors seven new shares for every two held and expects to price the new stock at $1.75 a share. The exact price will be determined after negotiations with underwriters, however.

Euro Disney stock traded Wednesday at about $6.40 a share on the Paris Bourse. The stock traded as high as $28 in early 1992 but fell to $4.16 last November as the park announced huge losses.

In a rare move, Paris securities regulators attached a warning to the rights issue prospectus stating that the company is not expected to show a profit before fiscal 1996.

Even after restructuring, Euro Disney will have $2.8 billion of consolidated debt, or nearly triple shareholder equity. The restructuring plan, agreed to between Euro Disney and 61 creditor banks in March, includes forgiveness on interest payments and some fees and royalties by Walt Disney Co., which owns 49% of the stock.