Eurotunnel chairman steps down ahead of debt talks

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The Independent Online

The chairman of Eurotunnel, operator of the rail tunnel linking Britain and France, is resigning from the top seat on the board in advance of crucial talks aimed at avoiding a default on its £6.2bn debt.

Jacques Maillot, who stepped into the breach at Eurotunnel last year when shareholders threw out the incumbent board, has relinquished his chairmanship in favour of a board member with more industrial experience.

Jacques Gounon, a former senior executive at Alstom who joined Eurotunnel's board in December, will replace M. Maillot as chairman.

M. Maillot will remain on the board as a non-executive director.

M. Gounon will now take the lead in discussions with Eurotunnel's creditors over its debt mountain. It has until the end of the year to find a way of meeting its interest payments or it will be in default on its £6.2bn of debt.

But before detailed talks on restructuring its borrowings, the board has to secure a waiver from creditors on its banking covenants.

Eurotunnel may be forced to cut jobs and reduce passenger services to improve its operating performance. The company posted a record loss of $2.5bn (£1.3bn) in 2003 after revenues fell short of predictions.

Eurotunnel said: "As we enter a new, essential phase, Jacques Maillot wished to transfer the responsibility of chairman to someone who could bring his expertise to the company."

M. Maillot's previous business experience is in the travel industry. He ran the French tour operator, Nouvelle Frontieres, before it was bought by the German travel group, TUI.

M. Gounon is a civil engineer by profession and has worked in the French transport ministry.

Eurotunnel wants to wrap up its debt discussions by June so investors can vote on an agreement at its annual meeting. Last year's meeting was a stormy affair, which saw the board thrown out by shareholders after a series of crises, including revenue shortfalls and spiralling construction costs, left the company heavily in debt.

Since then, sales in 2004 fell 4.9 per cent and its first-half 2004 loss widened to £82.2m from £17m a year earlier.