Eurotunnel to issue €900m cash call

Eurotunnel, the cross-Channel shuttle operator, is to announce a €900m (£700m) cash call to shareholders this morning, the last stage in a complex financial shake-up.

The money raised from the rights issue is expected to be used to pay creditors who received convertible loan notes as part of the restructuring.

Shares in Groupe Eurotunnel were suspended yesterday ahead of what the company called an "important announcement". It has been expected to launch a cash call for some time.

Repaying the outstanding three-year loan notes would save the company interest payments and allow shareholders to avoid further dilution. This month, it redeemed the first tranche of the notes.

Eurotunnel laboured under high levels of debt until last year when, after long-running and sometimes acrimonious negotiations, it agreed a restructuring package with creditors. That halved the debt but left creditors with a significant share of the equity.

This month, Eurotunnel revealed it had made a net profit - the first in its 20-year history - of €1m.

Chairman and chief executive Jacques Gounon said at the time he expected Eurotunnel would be able to pay its first dividend in 2009.

Eurotunnel has also been helped by an improvement in traffic figures, with car and lorry shuttles showing double-digit growth. Revenue rose for a third year in succession, by 6% to €775m.

When the financial results were published, Gounon said they showed that "the new Groupe Eurotunnel is nothing like the old".