Eurotunnel secures debt rescue package
Eurotunnel, the battered operator of the channel tunnel, is thrown refinancing life raft
Eurotunnel, the battered operator of the channel tunnel, is thrown refinancing life raft
Eurotunnel confirmed today that it had secured a refinancing agreement with
Macquarie, Goldman Sachs and Barclays that will save the company from going
bust.
The operator of the channel tunnel has been negotiating the refinancing for
months and was forced to suspend its shares on the London Stock Exchange and
delay the publication of its accounts while its was in discussions with
financial backers.
In a letter to shareholders, Eurotunnel’s chief executive Jacques Gounon said
the company’s board had secured the approval of an ad hoc committee of
co-financiers and was in ongoing discussions with the holders of the company’s
subordinated debt.
Under the agreement, Eurotunnel will be able to write off debts of £3.3bn,
approximately 54% of the company’s total debt. The company will also issue £1bn
of hybrid notes that can be converted into equity at a later date.
Eurotunnel will now need to secure the support of shareholders for the rescue
plan at its next AGM. Gounon encouraged shareholders to support the
restructuring, as it provided a ‘balanced agreement’.
‘Once the plan is in place, Eurotunnel will have a sound financial structure,
including a sustainable debt level and real prospects for the future,’ Gounon
told shareholders. ‘The coming months will be absolutely decisive for
Eurotunnel. They are, in simple terms, about saving your group.’
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