Upturn may aid new bank deal

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The Independent Online
MARY FAGAN

Industrial Correspondent

Eurotunnel's onslaught against the ferry operators over the summer months will be some ammunition in its negotiations with its banks next months to persuade them to advance fresh funds to enable it to keep afloat.

The September talks with the banks are an annual fact of life for the troubled tunnel company. But over recent weeks it has also been dogged by rumours that it is about to be plunged into another crisis and will be forced into a financial restructuring by next year.

The company declined to comment on its financial situation and the impact of the holiday season.,but one source said: ''The whole point of the talks are to produce a banking case and that involves an appraisal of our progress."

The latest worries over Eurotunnel's future surfaced earlier this month when is announced revenues well below expectations for the first half of the year. Sales in the six months of just pounds 104.5m came as a shock to City analysts who had been looking for pounds 500m in the year as whole. Eurotunnel's interest bill is rising by pounds 2m a day compared with daily revenues of pounds 600,000. The yawning gap makes improvements in market share vitally important as extra ammunition in the discussions with the 225 banks.

The controversy surrounding Eurotunnel was heightened earlier this week when the Paris Bourse launched an investigation into movements in the share price because of "rumours" surrounding the company.

This followed reports - later retracted - on a news agency, that Eurotunnel had already reached agreement with its creditor bankers to reschedule its debts.

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