Eurotunnel wins third debt waiver

Eurotunnel is fighting for its survival

Channel Tunnel operator Eurotunnel has won a third waiver period, allowing it to continue talks to restructure its debts and ensure it can keep operating.

The company has warned that unless it changes the terms of its debt repayment it would not be able to keep operating beyond the end of this year.

It hopes to hammer out a new framework agreement by the middle of May, to be voted on by shareholders on 30 June.

The new waiver period will run until 12 July, the company said.

Under the terms of its current debt agreement, Eurotunnel could be found to be in breach of the terms if it discusses a restructuring with any parties. Hence the need for the waiver.

The company said the latest waiver was key as it had managed to get the backing of all the main creditors.

Formed in 1987 to run the rail tunnel linking the UK and France, Anglo-French Eurotunnel has struggled ever since the tunnel first opened in 1994.

It was financed purely by the private sector, but revenue forecasts were never met, leading to the banks taking over the company's equity.

The main problem if faced was that passenger numbers had been overestimated, meaning it would always find it difficult to pay off the debts it ran up building the tunnel.

Last year Eurotunnel announced 900 job cuts as it sought to reduce costs.