HONG KONG : Hong Kong Disneyland has switched its hefty commercial loans to its US parent company, a spokesman said Wednesday, bringing the theme park a step closer to much-needed expansion.

The park, which recently celebrated its third anniversary in the southern Chinese city, has switched 3.3 billion Hong Kong dollars (423 million US) of loans and credit with banks to the Walt Disney Company, the spokesman said.

"Both the government and the Walt Disney Company are very happy we have come to this agreement," the spokesman told AFP.

"We can now focus on the further development of the park and more expansion."

The spokesman would not give the terms of the new deal but said the conditions were more favourable than its previous arrangements. The South China Morning Post said the new lending was just 1.5 percent above interbank rates.

The proposal was first put to the Hong Kong government, which owns 57 percent of the park, in June before being given the green light on Tuesday, the spokesman added.

Reports have said the government and the company have been at odds over the deal, after the park has performed below expectations in terms of visitor numbers.

New Hong Kong Disneyland chief executive Andrew Kam said last month that expanding the park was a priority, as it aims to lure more visitors.

The management has repeatedly refused to confirm visitor figures despite the huge public investment, but a recent newspaper report said numbers would hit 5.6 million in the third year, still well below prior expectations.

- AFP