Eurotunnel wins French agreement to ease taxes

11th May 2007, Comments 0 comments

PARIS, May 11, 2007 (AFP) - Eurotunnel, the troubled operator of the Channel Tunnel, on Thursday said it had made a deal with the French government which will alleviate its tax payments on future profits.

PARIS, May 11, 2007 (AFP) - Eurotunnel, the troubled operator of the Channel Tunnel, on Thursday said it had made a deal with the French government which will alleviate its tax payments on future profits.

Under the agreement, the finance ministry allows Eurotunnel to carry forward tax losses incurred between 2000 and 2002, totalling 890 million euros (1.2 billion dollars), indefinitely.

This means the company can offset any future company tax against that sum, in effect paying no tax on profit until it is used up.

"All the shareholders who despaired of the states (France and Britain) ever taking an interest in Eurotunnel's situation can now be satisfied," Eurotunnel chairman Jacques Gounon said.

He said Eurotunnel was expected to generate taxable profits in 2007 and that negotiations on a similar tax deal with the British government were ongoing, he said.

A public exchange offer for shares in Eurotunnel, part of a plan to save the company from liquidation, expires on May 15.

Eurotunnel's board recommended that shareholders accept the offer of one share in the entity's new holding company, Groupe Eurotunnel (GET) plus one share warrant, for each old Eurotunnel share tendered.

The acceptance threshold for the offer to go forward is 60 percent of outstanding Eurotunnel shares.

In November, holders of the company's 6.3 billion euros in bank debt as well as its suppliers voted in favour of a safeguard plan for Eurotunnel, which was approved by the Paris Commercial Court in January.

In early March, Eurotunnel reported that it had stemmed losses last year following a catastrophic 12 months in 2005.

The group said it made a loss of 204 million euros in 2006 compared with a loss of 2.808 billion euros in 2005.

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


Copyright AFP

Subject: French news

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