Eurotunnel working on rescue plan

Eurotunnel is weighed down by huge debts

Troubled Channel tunnel operator Eurotunnel has said it will have a full recovery strategy in place by October.

The firm's new managers, who took over following a shareholder revolt in April, said the plan would include cost cuts of 40m euros (£27m) a year.

They added that efforts were under way to shake up the firm's pricing policy, and that they were "actively working" on a refinancing plan.

Chief executive Jean-Louis Raymond said recovery now appeared "possible."

"We have identified the conditions that need to be met, but time is short," he said in a statement.

Price discrimination

The company said it may cut prices during off-peak times, and raise them during busier periods, in an effort to increase passenger numbers and revenues.

A spokesman said the new pricing policy would be "more aggressive."

Eurotunnel, weighed down by some £6.4bn in debt, and hit by stiff competition from low-cost airlines, is battling for survival.

The progress report comes 90 days after the firm's new management team took over.

The new team has been in place since April, when a group of rebel investors led by French publisher Nicolas Miguet won a shareholder vote to replace the entire Eurotunnel board.

The rebels, including many small French shareholders, were angered at the Eurotunnel's disastrous share price performance, and by the previous management's failure to tackle the company's debts.

They have lobbied unsuccessfully for the British and French governments to help it pay off some of its borrowings.

In Paris, Eurotunnel shares closed 5.3% lower at 0.36 euros.