UPDATE 1-Hong Kong votes for $468 mln Disneyland expansion

(Adds Disney comment)

HONG KONG, July 10 (Reuters) - Hong Kong lawmakers approved a government plan on Friday to spend HK$3.63 billion ($468 million) expanding the city's Disneyland theme park with Walt Disney DIS.N, boosting the smallest of Disney's five resorts.

With attendance falling short of targets, the government has been seeking ways to boost the number of visitors in the long term, given the threat from a rival Disney theme park planned for Shanghai.

Hong Kong will convert a significant amount of its HK$6.89 billion outstanding loan to the park into equity, while Walt Disney will invest HK$3.5 billion to help finance the construction cost and also convert its outstanding HK$2.76 billion loan to the theme park into equity. [ID:nHKG53329]

After Disney’s new investment and Hong Kong’s debt-to-equity swap, Hong Kong’s stake in the park will fall to 52 percent from 57 percent.

In a joint statement, Disney and the Hong Kong SAR Government applauded the Legislative Council’s vote on the plan to build three new themed areas at the park by 2014.

Financial Secretary John Tsang said the park already “has brought substantial economic benefits to Hong Kong.”

With its new features, the park “will rise up to the keen competition in the region on the tourism front, attracting more family visitors from around the world,” Tsang said.

Jay Rasulo, chairman of Disney Parks & Resorts, said the company was “eager to begin work” on the expansion.

“This substantial investment represents our continued commitment to and confidence in Hong Kong Disneyland and solidifies our partnership with the Hong Kong government helping assure the resort’s long-term success,” Rasulo said.

The three new themed “lands” will be called “Grizzly Trail,” “Mystic Point” and “Toy Story Land.”

(With additional reporting by Gina Keating in Los Angeles)

Reporting by Nerilyn Tenorio and Alison Leung; Editing by Dan Lalor and Matt Daily $1 = HK$7.75