Eurotunnel files for protection from creditors |
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Thu, 13 Jul 2006 11:20
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PARIS - Channel Tunnel operator Eurotunnel announced that it would file for protection from creditors after talks to save it failed. The company had set a deadline for Wednesday for the restructuring talks to succeed, but they failed early on Thursday.
Eurotunnel owes its creditors 6.2 billion pounds ($11.4 billion). The Anglo-French company is to ask a French court to appoint an administrator, who will oversee the whole process. "The subordinated creditors, led by Deutsche Bank, rejected the effort to reach a consensus agreement,'' the company said in a statement. "Eurotunnel is now forced to pursue legal proceedings to place itself under the protection of the Commercial Court of Paris."
The company's board is slated to meet today to discuss the events of the past two days. Chief Executive Jacques Gounon was bitter that the talks failed, "I fail to understand how an institution such as Deutsche Bank has maintained its unreasonable demands without taking into account the consequences on the 2,300 employees and 800,000 shareholders of Eurotunnel," he said.
However Arco, the group of Eurotunnel investors said it was willing to talk further and that the channel operator's deadline was artificial. "Once the Commercial Court has made its decision as to the opening of the safeguard procedure the bondholders will restart the discussions with a constructive attitude in order to find a consensus on the financial restructuring of Eurotunnel," the group added.
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