Eurotunnel saved from bankruptcy
15 January 2007, PARIS - A French court lifted on Monday a threat of bankruptcy over Eurotunnel, which operates the undersea rail tunnel linking France to Britain, but said a rescue plan must be applied within three years.
15 January 2007
PARIS - A French court lifted on Monday a threat of bankruptcy over Eurotunnel, which operates the undersea rail tunnel linking France to Britain, but said a rescue plan must be applied within three years.
A Paris commercial court approved a financial restructuring package to halve Eurotunnel's debt mountain, meaning the group will avoid a cash crisis predicted for early this year.
Eurotunnel chief executive Jacques Gounon expressed his "very, very great satisfaction" with the decision by the court, adding that "Eurotunnel is saved from bankruptcy".
Under the rescue plan, which has been accepted by creditors and must be implemented within 37 months, the company's debt of 9.0 billion euros (11.64 billion dollars) is to be halved.
A new company, called Groupe Eurotunnel, is to be created by means of an offer to shareholders to swap their shares.
"We are going to work extremely hard to implement the new structure in the quickest possible time," added Gounon.
In a separate statement, the company promised to implement its rescue plan in the first half of this year.
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.
The vast bulk of the company's debt is held by financial institutions but a large number of small shareholders, mostly in France, bought shares when the company was floated in 1987.
The Paris commercial court, which had granted Eurotunnel protection from its creditors in August, has been supervising the refinancing of the group.
Gounon said he hoped to complete the share exchange, under shareholders will be invited to exchange their shares in the old Eurotunnel into new ones in Groupe Eurotunnel, by the end of February or beginning of March.
At least 60 percent of shareholders must accept the offer, but several investors have already expressed misgivings, saying they face a raw deal if the debt refinancing goes through.
Addressing critics of the rescue plan, Gounon said that "all criticism, all contestations, any delay with the implementation of the plan will be very expensive for the company and will therefore be very expensive for them".
He also said that Eurotunnel would publish its accounts for 2005 and 2006, which have been held up because of accounting problems, in the second half of February.
Subject: French News