HK gov't announces expansion plan for Disneyland

HONG KONG, June 30 (Xinhua) -- The Hong Kong government and The Walt Disney Company (TWDC) have reached an agreement in principle on an expansion of Hong Kong Disneyland, Hong Kong's Secretary for Commerce and Economic Development Rita Lau announced Tuesday.

Rita Lau said that the expansion project would bring about some3,700 jobs in terms of man-years in the coming five years. The expanded Hong Kong Disneyland will give rise to total net economic benefits in present value (at 2008 prices) ranging from 64.7 billion HK dollars to 117.3 billion HK dollars up to 2044-45 under different scenarios.

The park expansion will be completed in phases over five years. The expanded park will have three new themed areas, namely "Grizzly Trail", "Mystic Point" and "Toy Story Land". There will be more than 30 new attractions, including exciting rides targeted at the young adult segment, bringing the total number of attractions in the park to over 100.

TWDC has given assurance that "Grizzly Trail" and "Mystic Point" will be exclusive amongst Disney theme parks worldwide and "Toy Story Land" will be exclusive within the Asian region, for five years from their respective opening.

On the financing arrangement, TWDC will contribute all the necessary new capital, estimated to be about 3.5 billion HK dollars, for the construction of the new themed areas as well as for sustaining the park's operation during the construction years. It will also convert the entire outstanding balance, projected to be 2.76 billion HK dollars, of its loan to the joint venture to equity.

The government will not inject any new capital into the expansion plan, Lau said. However, as a contribution to deleverage the joint venture, the government is prepared to convert a substantial part of its loan to equity, retaining a balance of not less than one billion HK dollars.

"According to current projections, the government will continue to be a majority shareholder of HKD after the capital realignment, retaining 52 percent shareholding," she said. (one HK dollar = 7.742 U.S. dollars)