Sir Alastair Morton, co-chairman of the Anglo-French tunnel operator Eurotunnel, assured shareholders yesterday that more rights issues were out of the question to solve the company's huge debt problem.
"You will note that we have not mentioned more equity from our patient shareholders," said Morton, "and we have no plans for a share issue." Morton announced that Eurotunnel will pursue some contractors and suppliers for compensation.
He also ruled out further borrowing to service the bank debt of about pounds 8bn. Mr Morton said he would continue to seek to cut the debt service costs via a reduction in the interest rate on the existing debt, but warned that the performance of Eurotunnel over the summer months would be crucial to the mood of the creditor banks. Private talks with the banks are scheduled for September.
Graham Corbett, chief financial officer, said the proportion of sterling debt at fixed rate increased from 46 per cent to 50 per cent, while the portion of French franc fixed-rate debt increased from 24 per cent to 33 per cent.
Since mid-May, Eurotunnel has captured 35 per cent of the freight service market on the Dover-Calais route. In April, the freight service carried 22,648 lorries, bringing the total to date to 85,556. In April Eurotunnel carried 96,735 cars, bringing the total to 270,677. Eurotunnel expects to carry its half-millionth car customer during June.
The market reacted to the news by marking shares down 6p to 182p.