New Eurotunnel boss drives talks on debt

EUROTUNNEL chairman Jacques Gounon has told staff he is taking over the mammoth task of renegotiating the group's £6.2bn debt. In a letter to employees, Gounon, who became non-executive chairman a month ago after boardroom disagreements, said he would prepare the company's case - a task handled until now by deputy chief executive Herve Huas.

Gounon will also take charge of relations with investors, financial shareholders and the Press.

His commitment to personally open talks with the 122 creditor banks of the over-borrowed Channel Tunnel operator comes almost a year after rebellious French retail investors threw out a British dominated board and replaced it with executives chosen by small shareholder organisations in an unprecedented coup.

But the new board was riven by splits and failed to open debt discussions. Last month, Gounon, a former civil servant and one-time executive of French engineer Alstom, took over the chair as Jacques Maillot, founder of travel company Nouvelle Frontires, left the Eurotunnel board.

Gounon has said he will produce a debt restructuring agreement by the 15 June annual meeting, a date the company still insists is its target. But, according to a source close to the creditors' agent banks - HSBC and Calyon - restructuring talks have yet to begin.

Eurotunnel has still not even reached agreement with the agent banks on the terms of a preparatory waiver to enable discussions to begin. 'We have heard nothing,' the executive [source] said.

Nicolas Miguet, the French publisher and share tipster who orchestrated last year's boardroom coup in tandem with small-shareholders' organisation Adacte, has become infuriated with the lack of progress toward debt talks.

Unless Gounon makes headway, Miguet is threatening to lead a fresh rebellion against him at this year's Eurotunnel meeting. Eurotunnel has to agree a huge financial restructuring, most likely a debt-for-equity swap, before 31 December when an existing waiver on interest payments expires.

Because construction costs exceeded forecasts, and revenues are much less than expected, the group pays half its interest bill in 'stabilisation notes' - effectively convertible bonds. Should no deal be agreed, creditors can call on a French commercial court to appoint an administrator to take over running the tunnel on their behalf.

Paris-based management consultancy Solving International is said to have drawn up fresh cost-cutting plans enabling Eurotunnel to cut outgoings by up to €50m (£35m) a year by axing 774 staff.