Homes and Property | Home Page

Eurotunnel lenders slam rebels

13 April 2012

EUROTUNNEL's leading creditors have called a council of war that could see an early move to take control of the company.

This follows yesterday's shareholders' coup amid rowdy scenes near Paris. The new management is threatening to pressure lenders to cut the group's £6.4bn debts.

'The creditors have formed an ad hoc committee and they are about to meet to discuss the situation,' confirms a source at one bank.

Eurotunnel's £320m annual interest bill is nearly twice its operating profits. In theory it has until 2007 before risking default. But lenders are turning their attention to autumn, when it must produce new three-year financial projections.

Lenders believe these will give them the legal ammunition to force an early debt-for-equity swap, wiping out current investors.

Jacques Maillot, the incoming chairman, refuses to back down. He says: 'We will sit down with the lender banks and renegotiate the debt. The banks have to make an effort.' The new management will meet UK investors in London today.

Eurotunnel's debt is held by 200 institutions including HSBC, Credit Agricole, BNP Paribas, the European Investment Bank and many hedge funds. The debt trades at 60% of face value. Eurotunnel shares rose 1 3/4p to 38 3/4p.

The rebels' other proposals are also under fire. The British and French governments repeated their refusal to organise a bailout. Passenger service Eurostar flatly rejected the plan to raise Tunnel access charges 'in any circumstances'.

At yesterday's shareholder meeting, outgoing chief executive Richard Shirrefs was booed, management were mocked as 'hoodlums' and rebel leader Nicolas Miguet - an ex-politician with a colourful past - was cheered aggressively.

Shaken observers likened it to a rowdy political rally.

Useful links

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Sign up you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy notice .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in

MORE ABOUT

Banking
Eurotunnel
Hedge Funds
Loans And Lending Market