Eurotunnel Falls On Debt Deal Blues

The troubled Anglo-French company unveiled on Monday details of the refinancing its FFr 69.6 billion ($13.50 billion) of junior-ranked bank debt after a year of complex negotiations with bank lenders.

The shares were trading at FFr8.50 at 1052 GMT, on heavy volume of 16 million.

They were FFr9.15 when they were suspended on September 30.

Analyst Jean Borgeix at broker Pinatton said the stock market was disappointed with the FFr10.40 for which the banks will be getting new Eurotunnel shares in an FFr8 billion equity for debt deal.

The stock market had been looking for a conversion price of between FFr12-15 per share, he said. The current shareholders of Eurotunnel also stand to effectively lose 30 per cent of Eurotunnels future cashflow, as this is the percentage earmarked for paying the stabilisation notes it would issue to banks in return for an interest-free credit line.