Disney to forgo royalties on failing Hong Kong park

Nov 9, 2007, 11:14 GMT

Hong Kong - The Walt Disney company is to forgo royalties from it underperforming Hong Kong theme park as part of a plan to help the park boost attendance figures, a Hong Kong news report said Friday.

The company also said it has come to an agreement with its creditors to remove debt conditions on its 293 million US dollar loan for one year to allow it to make further investments in the park.

Hong Kong radio station RTHK said Friday the agreement, which will remove targets set by the lenders, were announced by Walt Disney's chief financial officer Tom Staggs in Los Angeles.

Earlier this week the Hong Kong government, which owns 57 per cent of the park, also said it was considering injecting more funds to help the struggling park.

The theme park has been battling against falling attendances since it opened in September 2005. It attracted only 5.2 million visitors in its first year, around 400,000 below its target.

In its second year, it fared no better with media reports speculating attendances of 33 per cent below its total visitor capacity.

The Hong Kong government has come under pressure from lawmakers who say it has invested too much in the commercial project.

Visitors claim it is too small and lacks sufficient attractions to occupy visitors for a whole day.

Public feeling is that the Ocean Park theme facility on Hong Kong Island - which houses Hong Kong's new pandas - offers better value. In May, Ocean Park set a new attendance record of 4.5 million people two months before the end of its fiscal year.