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Last Updated: Wednesday, 13 July, 2005, 10:10 GMT 11:10 UK
Troubled Eurotunnel in debt talks
Eurotunnel chief Jacques Gounon
Mr Gounon has warned the firm will go bust if a debt deal is refused
Channel Tunnel operator Eurotunnel has presented creditors with its plans to cut its 6.4bn ($11.3bn) debt mountain.

The firm needs to renegotiate its debt by October or risk bankruptcy. If creditors reject the plan, they could eventually take control.

The firm refused to detail its plans, amid hopes that confidentiality would "increase" its chances of success.

The news comes days after the firm revealed a 2% rise in revenues to 268m in the first six months of the year.

Bankruptcy worries

Its proposals for reducing its debt have been set out to the group's main creditors - but a secondary committee advising its less secure creditors was set up in April.

"The process of negotiation is likely to be complex, not least because of the formation of a second creditors' committee," Eurotunnel said in a statement.

At the end of the year, Eurotunnel will be obliged to start paying all the interest on its debt in cash, which is why the company wants to renegotiate funding arrangements with its 200 banks now.

Chairman and chief executive Jacques Gounon has tried to get the banks to simply write off 4bn of the total debt - something the banks have flatly refused to do.

Mr Gounon secured his post at the company last month, after seeing off a challenge from former chief executive Jean Louis Raymond.

Mr Raymond had quit the group a week earlier in protest at his chairman's handling of the crisis.




SEE ALSO:
Eurotunnel chairman wins battle
17 Jun 05 |  Business


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