Eurotunnel handed six-month bankruptcy immunity

09-08-2006

Troubled Channel tunnel operator Eurotunnel has been given a six-month reprieve after a French court granted its request for protection from its creditors, who had threatened to force the company to declare itself bankrupt.

The Anglo-French company appealed to the courts after the firm was unable to reach a deal to reduce its £6.2 billion worth of debt.

Eurotunnel has been saddled with the mountainous debt levels after struggling to repay the cost of building the Channel tunnel due to lower than expected levels of traffic.

The company's chief executive and chairman, Jacques Gounon, said that following today's "positive" court ruling, the firm now has a realistic chance of rescuing itself from insolvency.

I am convinced that we now have the conditions necessary to achieve a financial restructuring for Eurotunnel within the time allowed," he said.

Mr Gounon had warned last month that Eurotunnel would be insolvent by January if an agreement on restructuring the company were not reached by September this year.

The group applied for legal protection from its creditors after a minority group of its lenders, led by Deutsche Bank, rejected a restructuring deal proposed by the company.

The tribunal of commerce had been due to rule on Eurotunnel's request last week, but delayed its decision to allow more time for talks on a possible agreement.

A spokeswoman for Eurotunnel confirmed this morning that the company had met with its leading bondholders, including Deutsche Bank, ahead of the court's ruling.

She stressed that the meeting was aimed at "taking stock" of current negotiations between the company and its creditors and would guarantee the emergence of a debt restructuring deal between the various parties at the 11th hour.

Today's decision has similarities with chapter 11 bankruptcy rules in the US, but until now has not been applied to a large company under French law.

Under the procedures, Eurotunnel is permitted to continue operating while it addresses its financial deficit.

The company has been given an initial period of six months to draw up a debt recovery plan with the support of administrators appointed by the French court. During the period the company is not required to pay any interest on its debts.


Bookmark with:
Bookmark with: Digg Digg Bookmark with: Del.icio.us Delicious Bookmark with: Reddit Reddit Bookmark with: StumbleUpon StumbleUpon Bookmark with: Google Google Bookmark with: Technorati Technorati Bookmark with: Netvouz Netvouz

Latest News:

Search News
News Front Page
Accountancy / Tax
Advertising / PR
Armed Forces
Automotive
Aviation / Aerospace
Banking / Finance
Charities / Voluntary
Childcare / Youth
Construction / Property
Customer Services
Education / Training / Teaching
Emergency Services
Engineering / Electronics
Entertainment / TV / Theatre
Graduate Roles
HR / Recruitment
Health / Beauty
Hotel / Catering / Restaurants
IT / Internet
Insurance / Pensions
International / Overseas
Legal
Management / Business
Manufacturing / Industry
Media / New Media / Creative
Medical / Healthcare
Pharmaceutical Industry
Public Sector
Retail / Wholesale
Sales / Purchasing / Marketing
Science / Technology
Secretarial / PA / Admin
Skilled / Semi-skilled Manual
Telecommunications
Transport / Logistics
Travel / Tourism / Leisure