Last Friday, the Walt Disney Company entered into a new credit agreement with Citibank. The 364-day credit agreement is for up to $5 billion. The filing at Securities and Exchange Commission showed the credit agreement matures on April 9th, 2021. It can be extended if needed.
This maneuver helps provide significant liquidity for the Disney company. The current pandemic crisis has led to the temporary shutdown of Disney theme parks across the globe. Disney’s TV and movie production is on hold because of the pandemic. It’s also hurt ESPN by putting sporting events on hold. The new credit agreement allows Disney to have more cash on hand, which will help the company restart quickly when the pandemic ends. Disney will be able to resume film production and reopen its Disney theme parks with their liquid assets. If anything, this new credit agreement ensures Disney will be able to continue in making family entertainment.
It’s sad to see Disney theme parks being closed indefinitely, but they will reopen. Even though delaying theatrical releases has impacted Disney, their Disney+ streaming service is proving to be a success among Disney fans at home. Disney will be back soon to bring joy to theme park guests after this pandemic ends.
Source: Seeking Alpha
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