SHARES in Eurotunnel, racing to restructure its $14 billion (£8.7 billion) debt and head off bankruptcy, were suspended yesterday as progress was reported in talks with its creditors.
The Anglo French company, set up in 1987, has been struggling to negotiate a refinancing of some 72 billion francs of junior ranked, less secure, bank debt and interest since it froze payments a year ago.
The president of the Paris commercial court, Mr Jean Pierre Mattei, appointed mediators in February and extended their term in June and August. But a new extension is unlikely.
A Eurotunnel spokeswoman said it had asked for its shares to be suspended in Paris, London and Brussels to avoid speculation and the creation of a "false market" in the stock.
Eurotunnel shares had closed in Paris on Friday at 9.15 francs per share, compared with an all time high of 120 francs and a 1987 flotation price of 35 francs. The company's British quoted shares were worth 114p sterling.
In London, an analyst specialising in high yield securities, Ms Mary Ellen Collins of BDS Securities, said she was confident Eurotunnel would settle restructuring terms soon. "I am confident that a deal could be put together, maybe today, maybe by the end of the month," she told reporters.
The likeliest solution was an immediate debt for equity swap that dilutes 50 per cent of existing shares and a possible further dilution through the issue of convertible bonds, she said.
Although an outline financing has been roughly agreed between Eurotunnel and its six negotiating lenders, they have been unable to agree pricing of the debt conversion and convertible bonds which would lighten its loan payments.
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