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Last Updated: Monday, 15 January 2007, 15:22 GMT
Court backs Eurotunnel debt plan
Train going into the Channel Tunnel
Channel Tunnel hopes to leave bankruptcy protection
Eurotunnel has won court approval for a major debt restructuring plan aimed at securing the future of the troubled channel tunnel operator.

The Paris Commercial court backed plans which would see the firm's debt cut to 2.84bn ($5.6bn) from 6.2bn.

The move, which already has the backing of Eurotunnel's creditors, will pave the way for the Anglo-French firm to leave bankruptcy protection.

Eurotunnel has been struggling after running up debts building the tunnel.

New era

The company is currently operating under a "safeguard procedure", the French version of bankruptcy protection.

The procedure freezes debt payments and protects companies from bankruptcy - a process similar to Chapter 11 in the US.

This decision is good for the company, its 2300 employees and its shareholders

Under the terms of the restructuring plan, the newly formed Groupe Eurotunnel will make a share-swap offer for the French and UK share units of the current Eurotunnel companies.

This will go ahead during the next two months while Eurotunnel shares, which have been suspended since May, are set to resume trading next month.

Judge Perette Rey, who rejected a series of appeals from creditors who oppose the plan, said it opened "a new episode" for the business.

Eurotunnel said the refinancing would "lift the shackles of its debt and allow it to look to the future with confidence".

"This decision is good for the company, its 2300 employees and its shareholders," it said in a statement.

Eurotunnel has three years in which to implement the restructuring and needs the support of 60% of its investors for the share swap to proceed.

Chairman Jacques Gounon also said he was looking for concessions from the British and French governments, such as lower regulatory and licence costs, to ease its financial position.

Eurotunnel passes debt plan vote
15 Dec 06 |  Business
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14 Dec 06 |  Business
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27 Nov 06 |  Business
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01 Nov 06 |  Business
Eurotunnel unveils new debt deal
26 Oct 06 |  Business

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