Eurotunnel may join rail bidders to sell tax losses

Eurotunnel, the Anglo-French operator of the Channel tunnel, is considering joining the bids for part of the Government's rail privatisation to improve its financial health.

The Channel tunnel operator, under pressure from its bankers and with summer trafffic below forecast, is investigating selling its massive tax losses to cut its own debts.

Eurotunnel and its advisers last night confirmed they were looking at participating in bids for the profitable rolling stock companies being sold off by British Rail.

Although details are not clear, Eurotunnel would in effect sell the rolling stock companies the right to its tax losses in return for cash that would be used to meet part of the group's huge interest payments. The company's debts are currently about pounds 8bn and meeting repayments in full appears to be beyond the company without some form of debt reduction programme.

Those companies bidding for the rolling stock say they have been approached by KPMG, Eurotunnel's auditors, with a tax planning scheme that envisages bringing some of Eurotunnel's tax losses forward, enabling the winning consortia to pay less tax in the early years. Eurotunnel yesterday confirmed that it was interested in being a member of one or more of the consortia, although its membership would be for tax purposes only.

"The company is clearly not in the position of being able to make a financial investment in any of these consortia," a source close to the company said. "If this works, clearly Eurotunnel would derive a proportion of the benefit," the source said. It is not clear whether any such scheme would gain the acceptance of the Inland Revenue.

Several of the bidders are said to be interested in pursuing Eurotunnel's proposal while others, thinking that it will not gain Inland Revenue approval, have turned it down.

Hambros, which is advising the Government on the sale of the rolling stock companies, said it could make no comment about its discussions with any of the potential bidders. Bids for the three companies that lease passenger coaches and trains to the rail networks, have to be in by 15 September. The Government hopes to raise up to pounds 2bn from the sale of the three companies - Angel Freight Contracts, Eversholt and Porterbrook.

Eurotunnel is currently in the middle of a new cash crisis, which has forced its advisers and bankers to try all routes to avoid the company being put into receivership.

On current projections the company is expected to run out of money to finance its operations on 31 October and brokers do not expect it to make a profit after interest costs before the beginning of the next century.

In the current financial year Eurotunnel's losses are expected to be anywhere between pounds 470m and pounds 750m and next year they are expected between pounds 290m and pounds 670m.

Eurotunnel will be able to offset such losses against its tax liability in future years but the company's tax advisers are desperately trying to find a way of using them to provide a way of reducing the company's huge debt bill now.

The company's revenue targets for this year are likely to be missed because of a slow start to its summer operations.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger is in Argentina having chemotherapy

Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum
theatre

Returning to the stage after 20 years makes actress feel 'nauseous'

PROMOTED VIDEO
News
peopleThe Times of India said actress should treat it as a 'compliment'
News
news

Watch this commuter wage a one-man war against the Circle Line
News
We are phenomenally good at recognising faces; the study showed that humans have been selected to be unique and easily recognisable
science

Human faces unique 'because we don't recognise each other by smell'

Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show?
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
A male driver reverses his Vauxhall Astra from a tow truck
news

Man's attempt to avoid being impounded heavily criticised

Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Colin Firth and Emma Stone star together in Magic in the Moonlight: Woody Allen's 1920s romance

Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
Life and Style
The findings suggest that some of the genetic factors which influence birth size may play a part in influencing an infant’s mental development
health...while smaller babies have greater schizophrenia risk, study claims
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

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week