HONG KONG, June 25 Hong Kong has reached a deal
with the Walt Disney Co (DIS.N) to expand the local Disney
theme park, seen as necessary to bolster the park's long-term
prospects against a Shanghai rival, a newspaper reported on
The agreement is expected to be announced by June 30, with
details of the deal to be laid out to local legislators in a
special meeting, the Hong Kong Economic Times reported.
A spokeswoman for the Commerce and Economic Development
Bureau, which oversees the Disneyland project, confirmed to
Reuters that a special meeting had been called, but disclosed
The report said the deal was expected to be worth HK$7
billion ($903.3 million) of which HK$4 billion would be used
The size of Hong Kong Disneyland, the smallest of Disney's
magic kingdoms, is expected to almost double, with construction
to begin within a year, pending approval from the city's
legislative council in July, the newspaper reported.
Hong Kong's Financial Secretary John Tsang travelled to Los
Angeles in May, where he met senior Disney executives. The trip
is seen to have paved the way for the breakthrough after Disney
earlier said it would stall any expansion amid the credit
There was no immediate response from Tsang's office.
When contacted by Reuters, a Disney official in the United
States said discussions are ongoing, without giving any
The Walt Disney Co (DIS.N) earlier indicated it would
likely invest more capital in Hong Kong Disneyland and allow
the Hong Kong government to convert its loans to equity to
maintain its majority share of the theme park, a source
involved in their talks told Reuters earlier.
The Hong Kong government, which owns 57 percent of the
underperforming resort, desperately needs the expansion to
boost flagging attendance, with a much larger rival Disneyland
expected to be built in Shanghai in 2014 that could draw much
visitor traffic from the burgeoning mainland China market.
"At this stage, we have to support the expansion otherwise
it will be very difficult to compete with Shanghai in five to
six years time," said legislator Fred Li of the Democratic
Party, who said his party backed the expansion as long as
Disney boosted its financial transparency in future on
(Additional reporting by Gina Keating in Los Angeles)
(Reporting by James Pomfret; Editing by Chris Lewis and