Eurotunnel unveiled a wider first-half loss today due to a price war with cross-Channel ferry firms and higher costs, in its first set of earnings since its board was ousted earlier this year.
The Anglo-French company, which runs the undersea rail link between France and Britain, said the second half of the year would be no better, but that plans to cut up to 15 per cent of Eurotunnel's costs and tweak its commercial policy to spur revenue would start to bear fruit in 2005.
Those changes would not be enough to get the firm's debt-laden balance sheet in order and the company said it must hold urgent talks with its financial and industrial partners.
The value of Eurotunnel's shares and debt fell as investors fretted that the company's new managers may fail to fix its troubles, but the bosses said the dire results were not their fault.
Eurotunnel, hit by soaring construction costs from the outset and stiff competition from ferries and budget airlines, has failed to generate enough revenue to pay interest on its €9 billion debt, let alone return cash to investors.
Rebel retail shareholders sacked the entire board and top managers in April after a 90 per cent dive in its shares since flotation, drafting in Maillot to cut Eurotunnel's debt and reverse a decline in sales.
The April putsch was an historic victory for retail investors, who own over 80 percent of the company, but most experts say the new board will be forced to mimic their predecessors or risk losing control of the firm to creditors.