Debt standstill on Tunnel extended

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The Independent Online
Eurotunnel said yesterday it had reached agreement with its banks on a nine-month extension of a standstill agreement covering pounds 8bn of debts.

The extension, from 14 March to 14 December, is to take account of delays caused by last year's fire. But the company said the extra time did not signal problems in the bank negotiations over a financial reconstruction. The delay was necessary because Eurotunnel had put off the shareholder meeting to approve the plan from April to the end of June.

Patrick Ponsolle, co-chairman of the company, announced last month that he did not want to put the plan to shareholders until after fire damage to the tunnel had been repaired and Le Shuttle freight services had resumed.

Eurotunnel said it expected to agree the details of the financial reconstruction in time for shareholders to vote. The 225 banks agreed the extension of the standstill last Friday.

The company announced an 18-month debt standstill in September 1995 and this would have ended on 14 March without the extension, which required a vote of 65 per cent or more of the lenders by value to approve. Eurotunnel declined to say what the actual vote was.

The terms of the restructuring, agreed in principle last October with a steering committee of banks, must be fixed by the end of March so that a prospectus can be sent out in the first two weeks of April, to allow shareholders to vote on the package by 30 June.

A Eurotunnel spokeswoman said: "Working parties are studying the details of the various financial instruments and fixing the parameters."