NatWest retreats over attempts to oust Morton

NatWest appeared to be in retreat yesterday on its behind-the-scenes attempt to unseat Sir Alastair Morton, co-chairman of Eurotunnel.

This followed the disclosure yesterday that Roger Byatt, deputy chief executive of NatWest Markets, had suggested to Sir Alastair several times that he should quit early to smooth the path of debt negotiations with the banks.

Sources close to the negotiations said that leaks of NatWest's position were likely to forestall any attempts by Eurotunnel's leading banks to pressurise the company's board to drop Sir Alastair early. The banks have no direct power to remove a co-chairman.

Sir Alastair's contract expires in October but he made clear earlier this year that the Eurotunnel board has asked him to stay until the negotiations have been completed. The talks with the banks are due to start later this month and may last well into the autumn.

Mr Byatt and other senior figures in NatWest including John Melbourn, a main board director, believe that Sir Alastair was the right man to push through construction of the tunnel. But the bank now wants somebody else put in charge of renegotiation of the debt.

In a statement, a NatWest spokesman denied that Mr Byatt, the corporate lending chief who is in charge of the Eurotunnel negotiations, was the executive leading the campaign to unseat Sir Alastair.

The bank also said the matter was not discussed at last Sunday's weekly meeting of the bank steering group, which is held alternately in London and Paris.

However, it is understood that the issue of whether Sir Alastair should quit early has been discussed recently by leading banks. Sir Alastair has told them he intends to fight for the rights of shareholders under French law, which gives less weight to bank creditors in a financial rescue.

NatWest is one of four lead banks on the steering group handling negotiations on restructuring pounds 8.1bn of Eurotunnel debt. It is understood that two key French banks on the steering committee, Credit Lyonnais and BNP, have not been pressing for Sir Alastair to leave early.

It also emerged that a decision last week by Eurotunnel to switch brokers from SBC Warburg to Kleinwort Benson was the final move in a complete severance of the company's connections with the investment bank.

Comment, page 21

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