There's light at the end of the Eurotunnel

Article Abstract:

Eurotunnel is negotiating a financial restructuring and an agreement has to be reached with both creditors and shareholders. The company has a debt of 9 billion pounds sterling and is believed to be viable only if its debts are reduced to under 5 billion pounds. The banks could end up with 75% of the company's shares. A key issue will be the price of shares in relation to bonds or debt. Analysts are divided as to the long term prospects for the company's shares. Some see dilution affecting the value, while others see possible long-term value if banks absorb some of the costs.

Railroad tunnels

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How to escape from a black hole

Article Abstract:

Eurotunnel faces financial problems due to the high cost of building the Channel Tunnel. The company is likely to report losses of more than 700 million pounds sterling for 1995. There were 225 banks involved in helping to finance the project, and Eurotunnel has debts of 8.5 billion pounds sterling. A number of solutions are possible, including lower interest payments, an exchange of debt for equity, deferral of interest payments, and debt write-offs.

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Floundering in a sea of debt

Article Abstract:

Eurotunnel faces serious debt problems which cannot be solved by increasing its market share. The cost of building the Channel Tunnel was higher than forecast, and commercial operations began later than planned, with initial sales revenue less than forecast. The banks which lent money for the project are not likely to have their debts repaid in full, and shareholders are not likely to receive a dividend unless there is a longer concession period.

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