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Eurotunners debt plea
Page 14
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THE INCREASE in freight moving through the Channel Tunnel will not solve Eurotunnel's biggest problem — its .E6bn debt.
The troubled tunnel operator received a much needed boost to its freight business in the first quarter of 2005 (CM 28 April). But the company's central difficulty is that its interest payments alone far outstrip profits.
Eurotunnel chairman Jacques Gounon says a solution to the operator's debt problems would be for creditors to write off twothirds of the debts. Sometimes creditors take over a company that owes them so much. "There may be a possibility of this,says a spokesman. "But I don't think the creditors would want to run the tunnel and the contract to run the tunnel has to be approved by the two national governments."
Gounon hopes all parties will agree to write off a substantial part of the debwrso the paper-value of our debt is more in line with our market value".
The institutions owed the money, including The European Investment Bank, MB IA, Franklin Mutual Advisors and Oaktree Capital Management, immediately rejected Eurotunnel's suggestion.