A French court has approved a financial restructuring for Eurotunnel the company that built and operates the rail tunnel between Britain and France. The Paris Commercial Court has backed the proposal to pay creditors with cash and bonds which can later be converted into shares. It rejected 33lawsuits contesting the plan, but there are likely to be appeals to higher courts.
Eurotunnel’s Chief Executive Jacques Gounon said the company had been saved from bankruptcy. Under the restructuring, Eurotunnel’s debt – of 9.4 billion euros – would be cut to 4.3 billion. There will be a new loan, repayable over 40 years, of 4.1 billion euros.
The bondholders, who are owned money by the company, will end up with 87% of it; the current shareholders would swap their stock for a stake of as little as 13%. Many of the small French shareholders, who stand to lose much of their investment, have expressed opposition to the plan, but boss Jacques Gounon, said they would be “mad” to refuse the offer. Trading in Eurotunnel shares has been suspended since last May. Gounon said he hopes they would restart by the middle of February.