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Eurotunnel 'saved' by investors Eurotunnel 'saved' by investors
(2 days later)
Eurotunnel has won shareholder approval to slash the company's huge debts in a rescue plan that will secure the future of the troubled company.Eurotunnel has won shareholder approval to slash the company's huge debts in a rescue plan that will secure the future of the troubled company.
The French financial regulator said 87% of investors backed the proposals which will cut debts from £6bn (8.9bn euros) to £2.84bn and create a new firm.The French financial regulator said 87% of investors backed the proposals which will cut debts from £6bn (8.9bn euros) to £2.84bn and create a new firm.
"Eurotunnel has been saved," group chief executive Jacques Gounon said."Eurotunnel has been saved," group chief executive Jacques Gounon said.
The Anglo-French firm had faced bankruptcy unless its plans were backed by at least 50% of shareholders.The Anglo-French firm had faced bankruptcy unless its plans were backed by at least 50% of shareholders.
In approving the restructure, investors have agreed to swap their almost worthless shares in the ailing Channel Tunnel operator for a stake in a new company, called Groupe Eurotunnel.In approving the restructure, investors have agreed to swap their almost worthless shares in the ailing Channel Tunnel operator for a stake in a new company, called Groupe Eurotunnel.
The move wipes out some of the generous perks, including unlimited free travel, that original shareholders - those who bought shares in the company when it was established in 1987 - had enjoyed. The move wipes out some of the generous perks, which those who bought shares in the company when it was established in 1987 had enjoyed.
'Fresh start''Fresh start'
"I would like to sincerely thank shareholders who have shown their strong support," said Mr Gounon, who took over in 2004 after frustrated shareholders mounted a boardroom coup."I would like to sincerely thank shareholders who have shown their strong support," said Mr Gounon, who took over in 2004 after frustrated shareholders mounted a boardroom coup.
Mr Gounon has fought hard to save the firm from liquidationMr Gounon has fought hard to save the firm from liquidation
"It enables Eurotunnel to have a fresh start.""It enables Eurotunnel to have a fresh start."
The share swap success follows tough negotiations with creditors and puts a line under 20 years of financial problems for the group, which was set up to operate the Channel Tunnel.The share swap success follows tough negotiations with creditors and puts a line under 20 years of financial problems for the group, which was set up to operate the Channel Tunnel.
Groupe Eurotunnel will be bolstered by a long-term loan of £2.84bn from a consortium of banks including Goldman Sachs, Deutsche Bank and Citigroup.Groupe Eurotunnel will be bolstered by a long-term loan of £2.84bn from a consortium of banks including Goldman Sachs, Deutsche Bank and Citigroup.
Since the tunnel opened in 1994, losses sustained during its construction were never recovered through car and freight traffic or its high speed train user Eurostar, which meant the debt could never be paid back.Since the tunnel opened in 1994, losses sustained during its construction were never recovered through car and freight traffic or its high speed train user Eurostar, which meant the debt could never be paid back.
Eurotunnel is currently operating under French bankruptcy laws on the direction of the Commercial Court in Paris.Eurotunnel is currently operating under French bankruptcy laws on the direction of the Commercial Court in Paris.
The procedure freezes debt payments and protects companies from bankruptcy, a process similar to Chapter 11 bankruptcy protection in the US.The procedure freezes debt payments and protects companies from bankruptcy, a process similar to Chapter 11 bankruptcy protection in the US.