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Last Updated: Tuesday, 25 July 2006, 14:00 GMT 15:00 UK
Court delays Eurotunnel decision
Eurotunnel train
Eurotunnel has warned that it faces potential bankruptcy
A French court has delayed its decision on whether to back Eurotunnel's request for protection against its creditors.

The court in Paris is delaying its verdict by eight days until 2 August.

The news comes as Eurotunnel continues to struggle to reach a deal with its creditors to reduce its debt mountain, which stands at 6.2bn ($11.5bn).

Eurotunnel said it welcomed the delay and still hoped to reach agreement with its creditors, having paid 114m euros in interest.

The firm has earlier warned that without the court backing its request for protection, bankruptcy is a real risk.

Whatever happens in Eurotunnel's court case, the tunnel's passenger trains - which are run by Eurostar, a separate company - will not be affected.

Weak passenger numbers

Eurotunnel shouldered massive debts in order to dig the cross-channel rail tunnel, which opened in 1994.

Yet its business plan quickly got into difficulties when actual passenger numbers were greatly below its projections.

Eurotunnel is seeking the French equivalent of US "Chapter 11" bankruptcy protection, which gives firms time to rearrange their finances while still operating.

If approved by the courts, the "Procedure de Sauvegarde" would give Eurotunnel a six-month window of protection from creditors while it would continue to operate, while a court-appointed administrator attempts leads talks with creditors to try and restructure the company's debts.


SEE ALSO
Eurotunnel eyes 'rapid' debt deal
19 Jul 06 |  Business
Insolvency warning at Eurotunnel
13 Jul 06 |  Business
Eurotunnel boss woos dissidents
07 Jul 06 |  Business
Eurotunnel faces debt opposition
04 Jun 06 |  Business
Eurotunnel in debt reduction deal
31 May 06 |  Business
Eurotunnel warns over its future
12 Apr 06 |  Business

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