Euro Disney SAS has been given a 1bn euro (£516m, $1bn) lifeline by the Walt Disney Company as part of an ongoing financial restructuring of the Disneyland Resort Paris operator.

The American media group has provided permanent cash and debt relief of 400m euros (£274m, $533m) to Euro Disney. This includes 100m euros (£68.5m, $133m) through its subscription to a planned rights issue and 292m euros (£200m, $389m) in a debt for equity conversion.

Disney is the largest investor in Euro Disney, with a 39.1 per cent stake. The group’s shareholders approved Euro Disney’s proposed 250m euro (£171m, $333m) rights issue in conjunction with restructuring its 2.4bn euro debt.

Euro Disney will also be announcing its investment programme in greater detail in the new year.

Announcing the new investment plans, Euro Disney’s chair and chief executive officer, André Lacroix, said: “Our priority is to grow the revenues and build the EBITDA of the company while keeping in mind that more time will be necessary before the company is profitable again.

“We thank our shareholders and all of our stakeholders for their strong support during this period, as we approach the final step in the company’s financial restructuring.”

Euro Disney has until 31 March 2005 to complete its capital increase. After that, Walt Disney and Euro Disney’s other lenders will have 30 days to negotiate a new waiver of debt covenants and reach a new agreement on fianancial restructuring.