Bondholders agree last ditch Eurotunnel refinancing plan

The group of investors holding subordinated debt in Eurotunnel voted on December 14 to support the beleaguered Channel Tunnel operator's latest debt restructuring plan. The proposal to cut the company's £6.2 billion of debt to £2.9 billion was the company's last chance to avoid insolvency, and depended on the bondholders, who hold £1.9 billion of the debt. The plan includes the issuance of £1.28 billion in convertible bonds.

Bondholders had rejected earlier proposals on the grounds that they undervalued the company. Under the latest plan, senior investors will be repaid in full, holders of more junior, tier 3 debt are to receive £150 million in cash and £1.05 billion in convertible bonds and subordinated bondholders will be given £90 million in cash and £230 million in convertible bonds. Bondholders and tier 3 investors will be given a 16% and 71% share respectively in the restructured company, with existing shareholders taking 13%.