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Last Updated: Wednesday, 31 May 2006, 12:14 GMT 13:14 UK
Eurotunnel in debt reduction deal
Eurotunnel train
Eurotunnel awaits shareholders' approval of the debt deal
Channel tunnel operator Eurotunnel has announced a plan to restructure its debts, but has said it faces bankruptcy if investors do not approve the deal.

The plan, signed with banks Goldman Sachs, Barclays and Macquarie on Tuesday, would cut the firm's debt by 54% to 2.9bn ($5.45bn; 4.23bn euros).

Speaking at a news event in Paris, Eurotunnel said the deal required the approval of shareholders.

But "if 'no': bankruptcy", said the firm's president, Jacques Gounon.

Eurotunnel is to seek legal approval in France to postpone its annual general meeting from 30 June to 12 July.

By then, it hopes it will be able to ask shareholders to approve the restructuring plan.

If the deal is given the go-ahead by shareholders, the restructuring would start sometime in the final quarter of 2006.

The debt deal would include the creation of a new French firm to be listed in Paris and London which would oversee the restructuring deal.

Ever since the tunnel opened in 1994, the firm has been in financial difficulties. Last year, it cut 900 jobs in an attempt to reduce costs.

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