Sino-foreign joint venture
The Hong Kong Disneyland Resort is constructed and operated by Hong Kong International Theme Park Co., Ltd., a partnership between the Hong Kong government and Disney. The Hong Kong government will initially own 57% of the company. Equity, while Disney holds 43%; the company’s total equity value is HK$5.7 billion, of which the Hong Kong government will inject HK$3.25 billion and Disney will inject HK$2.45 billion. Both parties can sell shares in the company in the future, but Disney needs to hold at least HK$1.9 billion in shares, and the government is not subject to the minimum shareholding requirement. Share conversion restrictions begin five years after the park opens, with the conversion cap increasing by 5% each year. To avoid unduly affecting the value of other shareholders' shares, the maximum conversion amount in any year shall not exceed 10%.
The construction cost of Hong Kong Disneyland Resort was estimated at HK$14.1 billion in 1999. The Hong Kong government provided a loan of HK$5.6 billion to Hong Kong International Theme Park Company, which will be amortized with interest over 25 years. The company also raised HK$2.3 billion through commercial borrowings.
The Hong Kong government’s total investment is HK$2.245 billion, including the above-mentioned capital injection of HK$3.25 billion, equivalent to 57% of the equity. At the same time, the Hong Kong government will receive an additional 4 billion Hong Kong dollars in subsidiary equity to replace the land price of Hong Kong Disneyland. As Penny's Bay was not yet developed at the time, the Hong Kong government had to invest HK$13.6 billion in major infrastructure projects, including the construction of external roads, two public piers, highway transport interchanges, the MTR Disneyland Line, police posts, and fire stations. , drainage and sewerage facilities, and the formation of a 300-hectare land.
The Hong Kong government has not provided free land or cash subsidies to Disney. The land lease for the Hong Kong Disneyland Resort is for 50 years, with a 50-year renewal option. Hong Kong International Theme Park Co., Ltd. can choose to purchase the reserved second-phase development land for HK$2.8 billion (1999 land price market value) within 20 years after its opening. In other words, Disney has the priority development rights of the land.