Eurotunnel anger as DoT seeks bigger profit share

Eurotunnel warned that a row with the UK and French governments over proposals to extend its licence to operate the Channel Tunnel could hamper the approval of its pounds 9bn refinancing deal.

With a week left before the deadline for Eurotunnel's 174 banks to approve the debt restructuring package, the UK Department of Transport has raised the stakes in negotiations to lengthen its operating concession. The provisional agreement in July, which would extend the licence from 65 to 99 years, to 2086, was crucial in persuading shareholders to vote in favour of the complex debt-for-equity swap, which could see their stake in the company reduced to 40 per cent.

Patrick Ponsolle, the French co-chairman of Eurotunnel, said he had assumed the negotiations would be "fairly simple" and non-contentious, but the two governments were now seeking a bigger share of the company's profits during the extension period than the 25 per cent previously indicated. The DoT said it was "keen to improve" on the deal. "There have to be some benefits to the UK government and French government," said a spokeswoman.

Mr Ponsolle warned that Eurotunnel risked creating a false market in its shares if the restructuring plan was approved before the final deal on the operating licence. "We would have a substantial problem understanding how such a final agreement could substantially depart from what was indicated last spring," he said.

Georges Berlioz, the lawyer acting for one of the shareholders' action groups, said investors were likely to widen an existing legal claim in France against the refinancing package. "We are certainly reconsidering the position on the grounds that the information given to shareholders before the vote was misleading."

Jeff Summers, an analyst from debt traders Klesch & Co, said the DoT's demand for greater freight traffic through the tunnel was likely to influence the banks. "The logic of the DoT is commercial suicide for Eurotunnel. It suggests lowering charges for freight and that's the last thing they want."

Eurotunnel yesterday unveiled losses of pounds 323m for the first half of the year, down from pounds 372m a year ago, on revenues of pounds 230m, a rise of 12 per cent after adjusting for the surge in the value of sterling. It said it expected to make operating profits this year at least as big as the pounds 54m indicated in its most recent prospectus.

News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete tomorrow
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
booksWell it was good enough for Ancient Egyptians and Picasso...
PROMOTED VIDEO
Life and Style
Magic roundabouts: the gyratory system that has excited enthusiasts in Swindon
motoringJust who are the Roundabout Appreciation Society?
Sport
footballManchester City 1 Roma 1: Result leaves Premier League champions in danger of not progressing
Life and Style
The new Windows 10 Start Menu
tech
Travel
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
News
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?