Disney to back Euro Disney, stake talk "unfounded"

A portion of the signage at the main gate of The Walt Disney Co. is pictured in Burbank, California May 7, 2012. REUTERS/Fred Prouser

PARIS (Reuters) - Euro Disney EDLP.PA said parent Walt Disney Co. DIS.N had agreed to extend l.332 billion euros ($1.74 million) in loans to help refinance its debt but dismissed market talk Walt Disney might boost its stake in the French theme park operator.

“These are unfounded rumors,” Euro Disney Chief Executive Philippe Gas told a conference call with journalists on Tuesday.

Euro Disney shares rose sharply in recent weeks amid persistent speculation that Walt Disney planned to buy out the financially-troubled company.

The stock has gained 88 percent so far this year, giving it a market capitalization of 259 million euros ($338.14 million). Walt Disney owns 39.8 percent of the capital of Euro Disney.

Gas said in a statement that the refinancing deal will help Euro Disney reduce the cost of its debt and benefit from a greater flexibility for investments and operational management.

As of September 30, 2012, the group’s debt will amount to 1.710 billion euros.

The new transaction does not have any impact on the royalties due to the Walt Disney Company under the license agreement, the statement said.

Reporting by Dominique Vidalon; Editing by Elena Berton and Hans-Juergen Peters