Eurotunnel board chooses Goldman Sachs/Deutsche Bank as lead plan financing proposal

By Caroline Salls

Pittsburgh, Dec. 18 - Eurotunnel SA's board decided Goldman Sachs and Deutsche Bank's safeguard restructuring plan financing proposal will lead the financing of the company's safeguard plan, and the consortium will be required to ask Citigroup to join them to assure 30% of the financing, according to a company news release.

The company said both the Goldman Sachs and Deutsche Bank consortium and Citigroup financing proposals met the company's requirements, including providing a long-term loan of £1.5 billion and €1.965 billion, for a total of £2.84 billion, in the form of a classic bank loan, repayable by tranche between 35 and 43 years; and the underwriting of the Obligations Remboursable en Actions (ORAs), or convertible notes, in sterling and euros for holders of tier 3 debt, for an amount of £965 million, allowing for the monetization of the ORAs.

The company said the two offers also took account of the future operational financing needs of the company and the possibility of an additional debt stream of £225 million for the redemption of ORAs.

Eurotunnel said the financial charges on the new senior debt should start at around £140 million per year, with repayments of the capital not becoming due until 2012.

The company said this compares to the £293 million of interest for 2006 and the estimated £320 million for 2007 it would have had to pay on its old debt.

Eurotunnel is the Paris-based operator of the Channel Tunnel.

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