Embattled Eurotunnel cuts losses in 2006

7th March 2007, Comments 0 comments

PARIS, March 7, 2007 (AFP) - Eurotunnel, the operator of the Channel tunnel that has been fighting bankruptcy, reported Wednesday that it had stemmed losses last year after a catastrophic 12 months in 2005.

PARIS, March 7, 2007 (AFP) - Eurotunnel, the operator of the Channel tunnel that has been fighting bankruptcy, reported Wednesday that it had stemmed losses last year after a catastrophic 12 months in 2005.

The group said in a statement that it made a loss of 204 million euros (268 million dollars) in 2006 compared with a loss of 2.808 billion euros in 2005.

It stressed that operating profit had increased by 42 percent to 326 million euros in 2006 compared with 230 million euros in 2005.

"These excellent operational results show that only the new company Groupe Eurotunnel (GET SA), a result of a safeguard plan and a share exchange, relieved of half of its current debt and with sharply reduced financial charges, will be able to cast off the spectre of backruptcy," said chief executive Jacques Gounon.

Eurotunnel had been unable to publish results for 2005 and 2006 except for figures for revenues because of its dire financial state stemming from its crippling debt of 9.0 billion euros.

Sales rose 5.0 percent in 2006 to 830 million euros from 793 million euros the year before.

Publication of the results is an important step in the implementation of a plan to save the company from liquidation, which Eurotunnel warned on Wednesday was still a possiblity.

Trading in Eurotunnel shares is expected to resume shortly after trading on the London and Paris stock exchanges was suspended last May when the company failed to publish results for 2005.

Under the safeguard plan to rescue the company, its debt has been cut in half and management is to offer shareholders new shares in a company called Groupe Eurotunnel (GET SA), which will replace the existing Eurotunnel company.

But the swap can only be put into effect once Eurotunnel shares begin to trade again on the stock market.

Gounon said the share swap offer could be put to shareholders at the end of the month or beginning of April.

Eurotunnel, which has been through a number of crises, built up its debt during construction of the tunnel, which ran into cost overruns owing to technical problems and increased safety requirements.

Copyright AFP

Subject: French news

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