New Eurotunnel shares in meltdown

Both Eurotunnel share listings have been falling

Newly issued shares in Channel tunnel rail operator Groupe Eurotunnel (GET) have fallen by more than 40% on their first day of trading in Paris.

Existing Eurotunnel shares were swapped for shares in the newly created Groupe Eurotunnel after the firm agreed a deal with its creditors to cut its debt.

But analysts set a target price for the new GET shares well below the level at which they were issued.

GET shares were trading down 42%, at 45 euro cents, at close on Monday.

Analysts at Societe Generale envisage the newly issued shares trading at about 26 euros cents within one year.

Eurotunnel shares, which are set to be delisted, fell 6.5% to 72 cents.

Decades of problems

Since its formation in 1986, the Channel tunnel operator has struggled to make cash, owing to larger-than-expected construction costs and lower-than-estimated traffic through the tunnel.

Existing shareholders were able to swap their shares on a one-for-one basis in the new entity.

The share swap followed tough negotiations with creditors and put a line under 20 years of financial problems for the group.

Since the tunnel opened in 1994, losses sustained during its construction were never recovered through car and freight traffic or through its high speed train user Eurostar, which meant the debt could never be paid back.