3 billion of bonds redeemable in shares ORA

The various proposals for the restructuring of Eurotunnel debt are complex which makes it all possible manipulations. Can I nevertheless understand the issues and defining the rules for a successful restructuring Any restructuring must obey the legal and economic rules following. One: any restructuring must be consensual and therefore based on shared and balanced efforts. Two: result including cannot be appear new actors with rights on the social assets, without the agreement of the original creditors. Three: you should respect the degrees of security of the various classes of claims. Four: there cannot be any transfer of economic value of a class of creditors to another which would be contrary to the principles of the law and contractual obligations of the parties. Five: restructuring solutions must be sustainable in the sense that derived expenses must be covered by cash flow (risk-taking) resulting from the operational activity. How organized the Eurotunnel debt into coherent classes of creditors

It is composed of three elements: assimilated senior debt (2.548 million pounds), Tier-3 (1.782 million pounds) and bond (1.886 million) debt. Total debt reached thus 6.216 million pounds. But there is, moreover, a structure optimization of the debt with a positive value of approximately 200 million, giving a total debt of 6.016 million rounded to 6 billion pounds.

What are predictable cash flow If you exclude the revenue assurance by the companies of railway tunnel (MUC) users, a value of 60 to 70 million pounds, and disappearing in November 2006, it is a cash flow (Ebitda) of the order of 240 million in 2007, which must be deducted an annual flow of less than 30 million investment. Taking into account other loads, any restructuring creating a total flow of interest more than 190 million per year is not acceptable.

How were built two major restructuring proposed before 12 July They proposed both to repay or to consolidate the senior debt of 2.548 million. The solutions were different for the other two classes of creditors. A first plan was strong at Tier-3 (1.782 million amount) which, by the effect of multiple safeguards, was repaid almost to the nominal value, while obligations (amount of 1.886 million) were repaid to the tune of 75 million, or 4 of the nominal value, that bondholders are credited in the capital of the company, which is the result of the natural obligations priority on actions. In addition, the actual interest expense were above the acceptable limit.

Another plan, supported by Arco, proposed to treat legally and economically acceptable Tier-3 creditors and bondholders, including a capital increase of 540 million pounds. This plan included an opportunity to present to participate in the capital increase, shareholders could give them 15 to more than 35 of the capital of a company whose debt reduced to 4.05 billion (including hybrid), then ultimately to 2.55 billion, cash flows, net of interest on the debt and net physical investment, which was positive for several tens of millions of books.

At the end of the negotiations on 11 and 12 July, the central basis for negotiations is as follows: the debt would be reduced to 2.7 billion with a show of 1.3 billion of bonds redeemable in shares (ORA). After five years, the holders of ORA could have at least 19 of the capital of Eurotunnel. Discussions will continue for a company, managing physical infrastructure, whose value is significantly superior to 5 billion. The proposal, if possible before the possible appointment of a judicial administrator, must follow the five basic rules under the vigilant control of the directors of the two companies of Eurotunnel.