Eurotunnel sees light at the end of the day

Published on Monday 27 November 2006 00:16

EUROTUNNEL SA, the troubled operator of the rail link between France and the UK, said yesterday it had received offers from Citigroup and a group consisting of Goldman Sachs Group and Deutsche Bank to finance its proposed restructuring.

Based on the binding offers, Eurotunnel's annual interest charge would be "clearly below" the 220 million (148m) the company has budgeted for in the restructuring plan, said a spokeswoman for Eurotunnel.

Eurotunnel is seeking to exit bankruptcy protection, and creditors will vote on the restructuring proposal today. In the plan, creditors are grouped by the type of debt they hold. Some investors would be paid back in full and others would receive a mix of cash and bonds.

"The plan that will be voted upon tomorrow is already entirely financed," the spokeswoman said. Eurotunnel had indicated "the plan would be based on interest costs of 220m a year. We're clearly below that amount."

In Eurotunnel's plan, holders of senior debt, including Deutsche Bank, will be fully repaid. So-called Tier Three3, or mid-level, creditors will get 150m in cash and 1.05 billion of convertible bonds.