Eurotunnel credit waiver gets green light

21st April 2005, Comments 0 comments

PARIS, April 20 (AFP) - Eurotunnel, which operates a rail service linking France and Britain beneath the English Channel, said Wednesday it had obtained a waiver from creditors that opened the way for a restructuring of its massive debt.

PARIS, April 20 (AFP) - Eurotunnel, which operates a rail service linking France and Britain beneath the English Channel, said Wednesday it had obtained a waiver from creditors that opened the way for a restructuring of its massive debt.

In a statement to the London Stock Exchange, the Channel Tunnel operator said the waiver requested on April 5 had been approved by two creditor groups.

Eurotunnel's board had asked creditor banks for the waiver on payments on its debt - which amounts to about EUR 9 billion (USD 11.8 billion).

Eurotunnel chairman Jacques Gounon had already pledged to oversee debt restructuring talks with the group's 122 creditor banks after rebellious French investors threw out a British-dominated board and replaced it with executives chosen by small shareholder organisations.

If Eurotunnel does not manage to restructure its debt it risks bankruptcy at the end of 2006.

It is widely assumed that the British government does not want to get involved in a rescue, and the French government has indicated that it too wants to stand aside.

Construction of the tunnel was funded with equity bought mainly by French investors, including many individuals who invested their savings, and by borrowing.

The project ran into construction and equipment problems and cost overruns. Despite previous debt restructuring, it has been unable to generate the cash needed to meet debt-servicing payments.

© AFP

Subject: French News

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