D-day for Eurotunnel debt plans

If the plans are rejected, it means the end of the line for Eurotunnel

Eurotunnel investors are deciding on whether to back a debt restructuring plan that may save it from bankruptcy.

The move would wipe out some of their generous perks, including unlimited free travel.

Shareholders have until the close of business on Monday to decide whether to back plans that would significantly cut the firm's £6bn debt.

Eurotunnel must win backing from 50% of shareholders for the plan. If it fails, the firm will go into administration.

Eurotunnel said that feedback it has had so far has been positive, but added turnout from its UK shareholders has been historically low, which makes it difficult to fully gauge reaction to the plans.

But some of its 150,000 UK shareholders are leading a campaign calling for their generous travel rights to be retained.

While the result of the vote is unlikely to be announced for several days, Eurotunnel operations will continue as normal whatever the outcome.

Debt worries

Eurotunnel is currently operating under a "safeguard procedure" - the French version of bankruptcy protection - on the direction of the Commercial Court in Paris.

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

Its current restructuring plan, which would reduce the troubled company's debt to £2.84bn ($5.6bn) from the current level of £6.2bn, has already secured the backing of other creditors.

The Anglo-French firm ran up massive debts building the Channel Tunnel, as it underestimated the cost of the project.

Meanwhile, since the tunnel opened in 1994, car and freight numbers have failed to meet projections, and the resulting revenue shortfalls meant the debts could not be serviced as expected.