Eurotunnel debt crisis could lead to collapse

Warning to shareholders: 'If we don't reach agreement by the end of July then we never will'




The crisis at Eurotunnel escalated yesterday when Patrick Ponsolle, co- chairman, warned that the company could collapse if there were no breakthrough in talks with its creditor banks by the end of July.

He told 1,500 investors at a rowdy annual shareholders meeting in Paris: "If we don't reach an agreement by the end of July, then we never will."

If the company were put into receivership there were no precedents for working under conflicting French and British insolvency procedures. The debt talks were "complicated, long and extremely difficult".

Mr Ponsolle's comments are likely to alarm shareholders, after leaks in recent weeks appeared to show the beginning of progress in talks over restructuring the company's pounds 8bn debt.

Until recently, Mr Ponsolle had held out the possibility - though never a firm promise - of an announcement of a deal at the annual meeting.

Eurotunnel has been in crisis since it suspended payment of interest on its debts last September and Mr Ponsolle said that the interest incurred by the company was "excessive".

If it increased, the situation would be disastrous not only for the shareholders "but also for the banks who will never recover their money".

He said that an agreement had been reached in principle on a number of aspects of the negotiations, including a debt for equity swap and the reduction of the rate of interest on the original debt. But there remained a number of important sticking points.

These included the price of the conversion of the debt into shares, the date of the first dividend, and the payment profile afterwards.

But Eurotunnel gave no detail, angering shareholders, who shouted: "We don't give a damn. We want to know about the banks," after directors had given details of passenger and revenue figures earlier in the meeting.

Mr Ponsolle stressed that the shareholders would have to be patient. "I cannot get the company back on track in two years' time," he admitted, "and we have set an objective for a first dividend in 2004." Before the meeting began shareholders outside started banging their fists on tables and calling the company's directors "incapable and thieves".

Soothing music which greeted the shareholders' arrival at the Palais de Congres did nothing to defuse the atmosphere. Mr Ponsolle's opening words were met with boos and members of the assembly regularly tried to interrupt the proceedings. There were screaming matches between shareholders. After Mr Ponsolle's speech, Sophie L'Helias, the corporate governance consultant appointed by the French Investir magazine to represent 17,000 shareholders, accused the board of conflicts of interest.

She also brought into question directors' salaries and called for somebody outside the company to replace the British co-president, Sir Alistair Morton, who plans to retire once the negotiations with the banks are concluded.

Daniele Jann, a 54-year-old holder of 6,400 shares, said: "I just hope the banks leave us with a little money."

However, Mr Ponsolle tried to reassure them by announcing that his first priority was that "the shares remain in the hands of the present shareholders". He added that the banks contractual "right of substitution," which would allow them to scoop up all the shares in the company because of its inability to pay off the interest on its debt, was no longer valid and that "it only existed during the construction stage".

He said the French and British governments shared responsibility for the excessive construction and operating costs, and he highlighted the delay in their building of a high-speed line on the English side.

Life and Style
LifeReddit asked a simple question with infinite answers this week
Life and Style
Pepper, the 3ft 11in shiny box of circuits who can tell jokes and respond to human emotions
techDavid McNeill tests the mettle of one of the new generation of androids being developed in Tokyo
Life and Style
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Luis Suarez looks towards the crowd during the 2-1 victory over England
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
ebookA unique anthology of reporting and analysis of a crucial period of history
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business


£50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

(Junior) IT Systems Administrator / Infrastructure Analyst

£28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

Finance Officer

Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice