Shares in Euro Disney, the Paris-based theme park, tumbled almost 20 per cent on Monday after it announced a €1bn recapitalisation plan backed by US parent Walt Disney, prompted by a toxic combination of falling visitor numbers and heavy debts. Euro Disney, which has suffered a long history of financial problems since it opened in 1992, said Walt Disney, which owns 40 per cent of the company, would back a €420m rights issue, improving its cash position by €250m. Walt Disney will also convert some €600m in Euro Disney debt into equity and consolidate other existing lines of credit. The recapitalisation will enable Euro Disney, 10 per cent owned by Prince Al-Waleed bin Talal of Saudi Arabia, to reduce its gross debt burden to under €1bn from €1.75bn currently. The theme park, located a short train ride to the east of Paris, has been badly hit in recent years by the economic downturn in France and more widely in Europe, with visitor numbers sliding sharply. The company said attendance had fallen to between 14.1m and 14.2m in the 2014 fiscal year from 14.9m last year – which came on top of a loss of about 1m visitors over previous years. It said hotel occupancy had fallen in 2014 to 75 per cent from 79 per cent. Combined with the heavy burden of debt servicing, the result was an expected decline of up to 3 per cent in revenues in 2014 and a rise in net losses to up to €120m from €78m last year. "Disneyland Paris is Europe's number one tourist destination, but the ongoing economic challenges in Europe and our debt burden have significantly decreased operating revenues and liquidity," Tom Wolber, Euro Disney president, said in a statement on Monday. "This proposal to recapitalise the Euro Disney Group is essential to improve our financial health and enable us to continue making investments in the resort that enhance the guest experience." The recapitalisation comes after Walt Disney in 2012 had to bail out its European subsidiary by taking over Euro Disney's loans from a syndicate of banks and providing new funding. Minority shareholders will be invited to take part in the recapitalisation at the same price as Walt Disney. Euro Disney shares fell to €2.79 by mid-morning in Paris, down more than 19 per cent on Friday's close, after falling as low as €2.70.