Dec. 31 (Bloomberg) -- The Hong Kong government may accept new equity in lieu of cash on part of the HK$6.1 billion ($787 million) loan it provided to Hongkong International Theme Parks Ltd., Sing Tao Daily reported, citing people it didn’t identify.

The government may swap a portion of the 25-year debt into equity in Hongkong International, the Chinese-language newspaper said today. Venture partner Walt Disney Co., which is seeking additional funding to expand the Hong Kong theme park, will bear the costs of the project, and the government isn’t expected to offer additional funding, Sing Tao said.

Under the arrangement, the government will remain the majority shareholder in Hongkong International, the Hong Kong- based newspaper said. At present the government owns a 57 percent stake, with the remainder held by Walt Disney, Sing Tao said.

A spokesperson at Hongkong International said details on funding arrangements between its shareholders aren’t finalized, Sing Tao said. A government spokesperson said details about the park’s funding arrangements can’t be disclosed, the newspaper said.

Hongkong International may expand its theme park by one- third to help attract visitors, Andrew Kam, managing director of the park, said on Dec. 23.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

Last Updated: December 30, 2008 19:50 EST