12th Apr 2006 07:30
Eurotunnel PLC/Eurotunnel S.A.12 April 2006 12 April 2006 07:30 Eurotunnel requests waiver extension to continue negotiations Alert Procedure (France) - Joint Board extends financial reporting deadline Operational progress in 2005 Eurotunnel requests an extension to the waiver to pursue negotiations with allcreditors On 31 January 2006, a Memorandum of Understanding (MoU) was signed by Eurotunneland the Ad Hoc Committee of creditors, which represents more than 50% of theGroup's debt. A second waiver period (16 February-31 March) was put in place to allow thepresentation, to non- signatory creditors, of the outline framework of therestructuring agreed between the Group and the Ad Hoc Committee. This period also allowed the junior and subordinated creditors to groupthemselves into a single committee representing a large part of those particularcategories of debt. The Joint Board considered that the conditions were right to enter into a thirdperiod of negotiation - which will enable all of the creditors to come togetherfor the first time, in order to reach a consensual financial restructuring plan. In order to achieve this, the Joint Board has decided to request the opening ofa new waiver period, until the 12 July, with a review planned in mid May 2006. Alert Procedure (France) - Joint Board extends financial reporting deadline As has been announced on several occasions, Eurotunnel will not be able to meetits contractual obligations in the first half of 2007, given the planned end ofthe Minimum Usage Charge mechanism, defined in the contract with the Railwaysand the forthcoming significant capital repayments of the debt. In this context, the Group reiterates that the Credit Agreements provide: 1. A cash facility to a maximum amount of £50 million. 2. Recourse, in event of default, to a contractual "Standstill", of limited duration, which would permit Group to continue to operate normally whilst allowing negotiations on a financial restructuring plan to take place. This standstill could be interrupted by a qualified majority of creditors. This situation has led the auditors, as required under French law, to initiatean alert procedure concerning the continuity of operations in 2007. Until the result of the negotiations which are about to commence is known, theJoint Board considers that it is unable to give an opinion on the continuity ofoperations. It has therefore extended the reporting deadline. As a consequence,only provisional operating figures are presented below. The Joint Board has fixed the date of Eurotunnel's AGM on the 30 June 2006 at14h30 in Coquelles, France. Provisional operating figures for 2005* show encouraging first results from theoperational reorganisation. Full effect expected in 2006. • Revenue stable: £541 million +1% • First improvement in Shuttle Services revenue since 2002: +4%, to £295 million • Improvement of 4% in operating margin (to £299 million), to 55% of turnover In 2005, Eurotunnel implemented a major operational reorganisation, in line withthe Group's new economic model which seeks to improve the productivity andprofitability of its core business, the truck and passenger shuttle services. This is clearly seen in the new commercial approach, a better matching oftransport capacity to demand, a new pricing structure, tighter cost control anda significant reduction in staffing levels. This strategy has led to theimproved results for 2005. Despite a market which showed very little growth (although our first quarter washelped by the problems experienced at the port of Calais), the good resultsderive from a combination of improved revenue from Shuttle Services and areduction in operating costs. Eurotunnel thereby improved profitability with anoperating margin on turnover of 55% (2004: 53%). Based on the valuation ofassets at the end of 2004, the trading profit would be £153 million (+19%). 2005 should be considered a year of transition, which saw a new dynamism broughtto the Group. The operational reorganisation which was put in place during thesecond half of the year will not produce its full effect until 2006. Thesubstantial improvement expected in operating results will, however, still fallshort of the level required to meet the debt repayment schedule from thebeginning of 2007. Jacques Gounon, Chairman of Eurotunnel, said "Eurotunnel is undergoing aprofound reorganisation which is generating a substantial improvement inoperational performance. But beyond this positive new dynamism, we cannotguarantee the future of the Group in 2007, unless there is a global financialrestructuring. The new waiver which we have just requested should allow us toadvance towards that goal. I know that all parties concerned in this negotiationare very aware of its importance". *Un-audited figures Ndegrees 969/2006 For media enquiries contact:John Keefe: + 44 (0) 1303 284491. Email: [email protected] Cronin: + 44 788 759 1499 For investor enquiries contact Xavier Clement on + 33 1 55 27 36 27.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 between Folkestone, UK and Calais, France. Eurotunnel also earns toll revenue from train operators (Eurostar for rail passengers, and EWS and SNCF for rail freight) which use the Tunnel. Eurotunnel is quoted in London, Paris and Brussels. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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