Spain theme park runs out of cash

Managers hope to keep the park's doors open

Spain's biggest theme park - launched four years ago in an attempt to rival Disneyland Paris - has admitted it can no longer pay its debts.

Terra Mitica, in the Costa Blanca tourist trap of Benidorm, offers visitors a chance to relive ancient Mediterranean civilisations.

But although it aimed for 3 million visitors a year, it has achieved less than one-third of that figure.

Construction went over budget, and the park owes 161m euros ($193m; £108m).

"Stopping payments is the only way to guarantee the viability of the company," said director general John Fitzgerald, who insisted that the park would try to keep its doors open.

Big stakes

Terra Mitica was a prestige project, backed by the Valencian regional government, and eagerly promoted by Eduardo Zaplana, a minister in the previous cabinet and the former mayor of Benidorm.

Construction cost 480m euros, and Paramount Parks, a subsidiary of US entertainment giant Viacom, was brought in to manage day-to-day operations.

There is still no clear explanation for what went wrong at Terra Mitica, but the tourism sector as a whole has been a poor performer since the park was launched in 2000.

The park's owners tried to persuade creditors to swap their debt into shares in the park, but without success.

As a result, Mr Fitzgerald said the company would be suspending payments on an 82m euro loan.

Technically, that leaves the park insolvent, but management hopes to soldier on.

The Valencian government, the key player in its financing, said it was in full support of the park's attempts to work out its position.