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Eurotunnel move risks going bust

Contributed by editor on Jul 13, 2006 - 12:17 AM

 
EUROTUNNEL MOVE RISKS GOING BUST
 
It has emerged that Eurotunnel's decision to seek legal protection before last-minute negotiations with creditors could backfire.

Ahead of talks to halve its £6.3bn debt the Channel tunnel operator applied to the French commercial courts o­n Tuesday for legal protection from creditors.

However, as the talks with junior bondholders, went to the wire of a midnight deadline, it emerged that o­nly o­ne firm had been granted the "safeguard procedure" under French law. If Eurotunnel's application failed the company would face being wound up.

Mr Gounon has said bankruptcy protection is required to keep the business going and to retain staff, customers and suppliers while Eurotunnel is free to negotiate a new restructuring.

Eurotunnel has enough cash to last until early next year, insisted that passenger and freight shuttles as well as Eurostar trains will continue to operate as normal throughout this period.