Eurotunnel was to “place itself under the protection of the Paris tribunal of commerce” after the failure of negotiations on its debt with its creditors, a Eurotunnel spokesperson announced early on Thursday.
“Eurotunnel is forced to follow the procedure enabling it to place itself under the protection of the Paris tribunal of commerce,” the spokesperson said.
Subordinate creditors headed by Deutsche Bank “rejected the last effort to reach a consensual agreement with all the Eurotunnel creditors,” he added.
Eurotunnel, which operates twin rail tunnels beneath the Channel between France and England, said on Tuesday that it had already applied to a commercial court for a debt “safeguard procedure”.
This application, an alternative to declaring bankruptcy along the lines of US Chapter 11 protection, would freeze debt and enable the business to continue operating while a judge tries to mediate a debt agreement.
Eurotunnel and its creditors held last-ditch talks on Wednesday to cut and reschedule massive debt before the possible launch of bankruptcy procedures.
The meeting had been expected to produce a result before midnight but a spokesperson for Eurotunnel said the deadline had been set back to Thursday when a “solution” would be reached.
“There will be a solution on Thursday,” he said, adding that Eurotunnel’s supervisory board would meet on Thursday morning.
Creditors had called for a time-out late on Tuesday to study proposals from Eurotunnel aimed at digging the group out of a debt mountain of about €9-billion ($11,5-billion). The Eurotunnel proposal involves halving the debt to €4,24-billion.
Regardless of how the talks end, the tunnel will continue to function and trains will continue to run through it. – AFP