Hong King Disneyland expansion on hold

Walt Disney Co. has announced that the long-delayed expansion of Hong Kong Disneyland is being placed on hold due to a temporary breakdown of negotiations.

Disney and the Hong Kong government have been in lengthy talks over the financing of the second phase of the underperforming park's expansion. This phase of the expansion is expected to cost as much as HK$3 billion ($387 million.) Disney borrowed more than $1 billion for the project, in addition to the HK$6.1 billion the company currently owes the Hong Kong government, set to be repaid over 25 years.

Hong Kong Disneyland is the smallest Disneyland to date and has yet to reach the lofty attendance numbers expected of it. As a result of the park's poor performance and delayed expansion funding, Disney said it would fire about 30 Hong Kong-based "Imagineers" currently working on the conceptualization and planning of the expansion project.

"The uncertainty of the outcome requires us to immediately suspend all creative and design work on the project," the U.S. firm said in a statement.

The Hong Kong government has expressed great concern over this move.

"We consider that (Disney's) laying off of Walt Disney Imagineers who have been working on the design of Hong Kong Disneyland's expansion will not be conducive to the discussions and are puzzled by the company's decision," a spokesperson for the Commerce and Economic Development Bureau said in a statement.

The company, however, has not yet ruled out continued work on the expansion, should Disney eventually strike a deal with the local government.

"Despite this setback, The Walt Disney Company remains confident and committed to the long-term success of Hong Kong Disneyland," Disney said.