Eurotunnel restructuring plan draws new investor; subordinated debtholder opposition resolved

By Caroline Salls

Pittsburgh, June 23 - Eurotunnel SA said in a letter to shareholders that AXA (Private Equity) has recently committed to investing in its restructuring plan, and a British investor is also considering investing.

AXA joins Goldman Sachs and Macquarie European Infrastructure Fund as plan investors.

In addition, the company said it resolved oppositions from some subordinated debtholders who felt that they would not receive a sufficient recovery.

According to the letter, the subordinated debtholders had refused to sign the confidentiality agreements necessary to enter the discussions on the restructuring.

Eurotunnel said its board is proposing a financial restructuring, limiting dilution, with the possibility of refinancing in future and guaranteeing shareholder recovery.

The letter said the restructuring will cut the company's debt in half.

"Some will tell you that insolvency is the miracle solution. I do not know what is driving them," chairman and chief executive Jacques Gounon said in the letter.

"Given the wide distribution of capital, it is very unlikely that the Tribunal de Commerce would choose a continuation solution. It is more likely that the company would be taken over by an industrial group or groups.

"The existing shareholders would lose everything."

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

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