Eurotunnel creditors meet to vote

http://news.bbc.co.uk/go/rss/-/1/hi/business/6185932.stm

Version 0 of 1.

Eurotunnel creditors will vote on the debt-ridden Channel tunnel operator's restructuring plan on Monday.

The Anglo-French firm owes £4.2bn (6.2bn euros) to 54 creditors and needs at least half to attend the meeting.

For the restructuring deal to then go ahead it must be backed by creditors holding two-thirds of the total debt.

Under the deal, existing shareholders would have a minimum 13% stake in a new company that would make an offer for Eurotunnel's shares early next year.

Eurotunnel, which has a debt mountain of £6.2bn ($11.7bn), could go into liquidation if the plan is defeated.

Although it already has agreement for the restructuring from creditors holding about 50% of the debt, Eurotunnel is worried that it might have to recall the meeting if too few turn up.

Bank support

The restructuring plan involves the creation of a new firm, Groupe Eurotunnel, bolstered by a long-term loan of £2.84bn from a consortium of banks including Goldman Sachs, Deutsche Bank and Citigroup.

Eurotunnel ran up massive debts during construction of the Channel tunnel, which opened in 1994.

Eurotunnel's business plan quickly got into difficulties when actual passenger numbers failed to meet its projections.