Eurotunnel inks binding debt restructuring deal

24th May 2006, Comments 0 comments

PARIS, May 24, 2006 (AFP) - Eurotunnel, which operates the Channel tunnel linking Britain and France, said it and an ad hoc committee of major creditors on Wednesday signed a preliminary binding agreement on restructuring the group's debt.

PARIS, May 24, 2006 (AFP) - Eurotunnel, which operates the Channel tunnel linking Britain and France, said it and an ad hoc committee of major creditors on Wednesday signed a preliminary binding agreement on restructuring the group's debt.

Discussions will continue with other lenders including junior bondholders, it said, without giving details of the deal.

At the same time, Eurotunnel will continue to explore with international financial institutions the best ways to put in place a new corporate financing for the group, it said.

Eurotunnel will seek to obtain approval from the French commercial court to postpone the general meeting of Eurotunnel from June 30 to July 12 in order to present a "complete outline" for approval by shareholders, it said.

Last week Eurotunnel said it was postponing a mid-May update and was asking for its shares to remain suspended in Paris and London while it continued discussions with creditors and a consortium led by Goldman Sachs Group and Macquarie Bank.

"The possible enlargement of this consortium has led to the negotiations being prolonged," Eurotunnel said.

Cost overruns and strong competition have prevented the business from generating the cash it needs to service and repay debt of EUR 9 billion.

Shareholders, many of them small savers from France, have had a rough ride throughout the life of the tunnel, apart from a period in the early years, and the company has already been rescued once with a debt restructuring that diluted the interests of small stakeholders.

Copyright AFP

Subject: French news

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