26th Oct 2006 15:56
Eurotunnel PLC/Eurotunnel S.A.26 October 2006 26 October 2006 Immediate release The "Safeguard" restructuring proposals: simple, balanced and realistic In accordance with the French "Safeguard" law, the Board of Eurotunnel hastoday, Thursday 26 October 2006, approved proposals for a draft "Safeguard"restructuring plan, put forward by the company with the support of therepresentatives nominated by the Paris Commercial Court. Following consultationtomorrow, 27 October, with staff representatives, these proposals will benotified to creditors by the court appointed representatives. The principal elements of the proposals are: 1. The creation of a new company, Groupe Eurotunnel, which will launch an Exchange Tender Offer (ETO) to Eurotunnel's current shareholders. The shareholders will hold a minimum 13% of the equity in Groupe Eurotunnel. 2. Groupe Eurotunnel will subscribe to a new long term loan of £2.840 billion (less than half of the current debt) from an international banking consortium. 3. Groupe Eurotunnel will issue £1.275 billion of convertible hybrid notes. The hybrid notes will be convertible over a maximum of three years and one month. Approximately 61.7% of the hybrids are redeemable by the company. 4. Current Eurotunnel shareholders, who subscribe to the ETO, will hold a minimum of 13% of the equity in Groupe Eurotunnel. They can subscribe directly to the hybrid, up to a value of £60 million (c• 87.7m) and will benefit from free warrants. The redemption of hybrid notes by the company would allow them to increase their share of the equity from 13% to 67%. Jacques Gounon, Chairman and Chief Executive said, "These proposals representthe best possible equilibrium between the demands of the different stakeholders;they retain an exceptional amount of equity and accretion potential forshareholders in comparison to other restructurings. With the debt write off,Groupe Eurotunnel will be able to re-launch from a solid base, and finallydevelop and grow." Note to editors: The creditors will have to vote on the proposals before the end of November. Ifthey vote against the proposals, the company will be placed into administration. If they vote in favour of the proposals, a Draft Plan will be put forward to theParis Commercial Court which will issue the Safeguard Plan for the company. Ndegrees 996/2006 For media enquiries contact John Keefe on + 44 (0) 1303 284491. Email: [email protected] For investor enquiries contact Michael Schuller on + 44 (0) 1303 288 749. Email: [email protected] www.eurotunnel.com Eurotunnel manages the infrastructure of the Channel Tunnel and operatesaccompanied truck shuttle and passenger shuttle (car and coach) services betweenFolkestone, UK and Calais, France. Eurotunnel also earns toll revenue fromtrain operators (Eurostar for rail passengers, and EWS and SNCF for railfreight) which use the Tunnel. Eurotunnel is quoted in London, Paris andBrussels. ANNEX 1 Draft Restructuring Plan proposals (Outline) A new company • "Groupe Eurotunnel", created via Subscribes to a new long term loan Exchange Tender Offer Issues hybrid notes and warrants A new debt • Long term loan "Investment grade" £2.840 billion (• 4.16 bn) • (no mezzanine or capitalised interest) interest at market rates compatible with forecast cash flows Maturity 40 years • Financing under negotiation Shareholders • An exceptional percentage of equity 13 % guaranteed for shareholders for this type of restructuring • Which can be increased 13 % minimum guaranteed, could increase up to 67 % through the redemption of hybrid notes Hybrid notes • Issued by Groupe Eurotunnel £1.275 billion (€1.87 bn) £787 million (€1.154 bn) redeemable • Partially redeemable by Groupe £488 million (• 716 bn) non redeemable Eurotunnel • Partially accessible to shareholders £60 million of the £1.275 billion (€87.7m of who subscribe to the ETO €1.87bn) No conversion in the first year • Conversion spread over 3 years £67m (€98m) after 13 months and one month £67m (€98m) after 25 months residue after 37 months Interest: • With specific economic conditions Non redeemable hybrid 3% (quasi equity) Redeemable hybrid 6% Hybrid cost of hybrid note + 40 % • Redemption mechanisms Further loan £225 million Rights issue Warrants • Issued by Groupe Eurotunnel • Distribution of free shares As a result of exceptional circumstances 55 % granted to shareholders who subscribe to the ETO Exchange rate: 1 £ = 1,46635 • ANNEX 2 THE CURRENT DEBT Current Debt £6.2 billion (c9,1 bn•) Debt written off by current creditors £3,36 billion (c4,9 bn•) (54 % of debt written off) New senior debt financed by banking consortium £2,84 billion (c4,16 bn•) Senior debt 4th Tranche, Tier 1 A, Tier 1, Tier 2 Will be offered a complete refinancing of principal and interest. Tier 3 + bond holders £240 million (c352 m•) in cash, from the new financing £1,275 billion (c1,820 billion •) of convertible hybrid notes. 62% of these hybrids are redeemable by the company over 3 years and the residue of these hybrids, not redeemed, by theshareholders. Exchange rate: 1 £ = 1,46635 • This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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