French shareholders rail at Eurotunnel banks

Debt crisis: Small investors make their stand against restructuring plans to grab part of their equity

About 700 French shareholders in Eurotunnel protested in Calais yesterday, accusing banks of staging a "hold-up" with their plan to restructure the huge debts of the channel tunnel operator.

The protesters were trying to gain support for their own solution to Eurotunnel's mountain of debts, and to lament their dwindling investment. They came from all over France, Paris Montpellier, Strasbourg, Rennes, Lille and Bordeaux.

Eurotunnel shares have crashed to Fr5.85 on the Paris bourse from a peak of Fr130 in July 1989. Eurotunnel had a 1995 net loss of pounds 925m.

Carrying banners comparing the battle over Eurotunnel to the scandals of defaulted Russian Czarist bonds at the beginning of the century, many of the shareholders arrived at the Eurotunnel offices on the French side of the tunnel on a chartered high speed train from Paris.

"This march symbolises what we've lived through. You needed a strong heart to survive the price fluctuations," said one pensioner from Sete, a town by the Mediterranean.

Another pensioner from western France said: "I worked all my life for nothing, all my savings have gone up in smoke. I lost a million francs."

The protesters were met by Eurotunnel representatives. But French co- chairman Patrick Ponsolle was absent, regretting that he had to attend a meeting in London.

According to news leaks, the banks' plan involves a debt-for-equity swap that would give the lenders 49 per cent of Eurotunnel in exchange for up to pounds 3.5bn in debt.

The Eurotunnel shareholders association's own plan calls for the banks to write off 30 per cent of their debt and issue a Fr28bn bond, convertible into Eurotunnel shares.