Eurotunnel sends Safeguard restructuring proposals to creditors

By Caroline Salls

Pittsburgh, Nov. 2 - Eurotunnel SA has sent its draft Safeguard restructuring plan proposals to creditors, in accordance with the calendar defined by the Paris Commercial Court in Eurotunnel's Safeguard procedure, according to a company news release.

The restructuring proposal was approved by the company's board, and the creditors will be required to vote on it.

According to the release, court appointed representatives are responsible for consulting with the creditors, and they will set the details and timing of the vote.

As previously reported, the creditors must vote on the proposals before the end of November.

If they vote against the proposals, the company will be placed into administration. If they vote in favor of the proposals, a draft plan will be put forward to the Paris Commercial Court, which will issue the Safeguard plan for the company.

Under the proposals:

• A new company will be created, called Groupe Eurotunnel;

• Groupe Eurotunnel will launch an exchange tender offer to Eurotunnel's current shareholders. The shareholders will hold a minimum of 13% of the equity in Groupe Eurotunnel;

• Groupe Eurotunnel will subscribe to a new 40-year £2.840 billion long-term loan from an international banking consortium. This financing is currently being negotiated;

• Groupe Eurotunnel will issue £1.275 billion of convertible hybrid notes, which will be convertible over a maximum of three years and one month. About 61.7%, or a total of £787 million, of the hybrids are redeemable by the company; and

• Current Eurotunnel shareholders, who subscribe to the exchange tender offer, will hold a minimum of 13% of the equity in Groupe Eurotunnel.

These equityholders can subscribe directly to the hybrid, up to a value of £60 million, 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%, Eurotunnel said in the release.

The hybrid notes will not be convertible in the first year, £67 million will be convertible after 13 months, another £67 million after 25 months, and the rest after 37 months.

Redemption mechanisms include a £225 million additional loan or a rights issue.

Interest on the non-redeemable hybrid notes will be 3% (quasi-equity), and interest on the redeemable hybrid notes will be 6%.

Eurotunnel is the Paris-based operator of the Channel Tunnel.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.