27th Oct 2005 07:02
Eurotunnel PLC/Eurotunnel S.A.27 October 2005 27 October 2005 PROGRESS REPORT Eurotunnel update on debt negotiations Following the presentation by the Group, in June 2005, of its Business Plan tolenders, debt negotiations started on 13 July 2005. At the halfway stage of the negotiation process (the waiver comes to an end on31 January 2006), Eurotunnel is negotiating solely with the "Ad hoc Committee"of creditors, formed in 2003 and representing c45% of the debt. Eurotunnel firstpresented its initial reflections for restructuring in July. Since then therehave been numerous exchanges between the company and the committee. Two other creditor committees have been formed in the meantime, eachrepresenting approximately 10% of the debt. The representatives of these othercommittees, the bank Close Brothers and the solicitors, Allen & Overyrespectively, have been given access to the Business Plan, but have not beenpresented with any proposals. As the members of these two Committees wish tokeep their option to trade the debt, they have not been informed of any of thediscussions with the Ad hoc committee and are therefore not yet involved innegotiations. After just three and a half months of negotiation between the Company and the AdHoc Committee, real progress has been made and the process is proceeding in linewith Eurotunnel's timetable. On the basis of information provided in the Business Plan and from the detaileddue diligence work carried out by the creditors, both parties are diligentlyworking to reach agreement on both Eurotunnel debt capacity and on the totalenterprise value. Eurotunnel would like to simplify its future debt structure, to move away fromthe project finance approach, with the constraints that this entails, to onemore suited to a concession manager with prospects for development. To this end,negotiations are underway on a number of different options which couldeventually make up the future structure. In late September 2005, the Joint Board of Eurotunnel took the decision not toconvert the Stabilisation Advances and Notes into Units. The Joint Board tookthe view that the debt should be considered as a whole and that conversion of 9%of the total debt and furthermore very junior debt was not currently in linewith the Group's interests. As a protective measure, Eurotunnel has proposedthat the option to convert the Stabilisation Advances and Notes be extendeduntil September 2006; it is now up to the creditors to decide whether this isacceptable. The next stage of the negotiation will be to agree the mechanism for therestructuring, taking into account the different views of all stakeholders,firstly with the Ad Hoc Committee and then with the other creditors committeesat the moment that they enter into the discussions. Eurotunnel Chief Executive, Jacques Gounon, said "In just a short time we havemade encouraging progress. The negotiations with the Ad Hoc Committee areintense and constructive and are in line with our original timetable. I considerthat the dialogue we have established with the Ad Hoc Committee should enable usto arrive at a viable and long term solution for the Group". For media enquiries contact the Eurotunnel Press Office on + 44 (0) 1303 288728or + 44 (0) 1303 288737. Email: [email protected] For investor enquiries contact Xavier Clement on + 33 1 55 27 36 27. Email:[email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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