| Tunnel on its way to debt renegotiation talks |
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Eurotunnel heads have called a meeting today to begin talks about the restructuring of the Channel Tunnel operator's massive £6.2billion debt.
Talks had so far been delayed because of the on going dispute regarding the £13.2million advisory fees claimed by the creditors. The process of talks between the two parties could start only once Eurotunnel received formal approval from the creditors, who had the right to call this renegotiation of debt a mere default or failure to make repayments. It is being anticipated that the directors will approve of a lower amount in today's meeting.
However, once the creditors agreed to ‘waiver’ their right to call for an evasion of repayment or declare a default on repayments, dialogues about the debt could be expected to trigger off in the next month itself.
Unable to meet its financial goals ever since its inception in 1994, Eurotunnel is now caught in an intense debt storm and is still struggling hard to make interest payments on its huge debt.
Understandably, Eurotunnel is under immense pressure with the risk of creditors’ seizing the firm by calling back the debt. It is only keeping its fingers crossed as it wishes for the deal to be struck before the year ended, because that would mean paying interest on debt in cash, whereas it can issue bonds at present for any interest amount that it cannot pay.
Posted
on : Wed, 30 Mar 2005 00:00 GMT | Debt News
By : Mark Richardson
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