Cannot leave the bondholders on the sidelines

The approach of critical deadlines, the climate tends around Eurotunnel. While its President Jacques Gounon asked its creditors to validate an agreement for the restructuring of debt of here on May 15, bondholders wish to have their say. This last Thursday, of great institutional European financiers, including Deutsche Bank, gathered in an association, known as Arco (Association of representation of the holders of bonds and other debt securities). "This association represents 60 of the bond, which themselves are one-third of the Eurotunnel debt", said its President Jean-Pierre Mattei, former President of the tribunal de commerce of Paris. And type of the fist on the table: "Jacques Gounon seems to want to ignore us." There is no consensus for now. Cannot leave the bondholders on the sidelines. Are we in transparency and equality around the negotiating table.

From July 2005, Eurotunnel and its Councils, Lazard and Lehman Brothers, had negotiated with an ad hoc Committee representing 50 of the approximately EUR 9 billion of debts on the liability of the concessionaire to the channel tunnel. A secret agreement remained, the famous slack ("memorandum of understanding"), was signed on 31 January with this group of American credit Enhancer MBIA or the European Investment Bank. But this Protocol must now be validated by the rest of the lenders to a majority of 75 for the seniors to be put to the vote of the General Assembly on 30 June.

"Everyone must make a gesture".

The question is to know the distribution of efforts between shareholders and creditors, and between the different families of lenders. "The bond still did not have access to the"memorandum of understanding"", strongly Jean-Pierre Mattei. According to him, Alain Le Berre, of Close Brothers, Council of bondholders, but signed a confidentiality agreement, but had no access to this day. "If the schema, reinforce the bank debt and sacrificing the bond debt, it is irresponsible." It is normal that each make a gesture, including shareholders. "And then said,"do not forget that the bond debt facilitated the first restructuring.

In this case already very complex, the calendar is is tended recently with the intervention of the Commissioners to accounts that triggered the alert procedure. From there, the mechanics of the French law went underway, in conjunction with the commercial court, with as always possible outcome a deposit balance. "If Jacques Gounon attempts to lead a negotiating tactic, forgetting his bond, first to then summon them to come to Canossa negotiate the conditions it imposes, it bears a heavy responsibility." I think an agreement contractual and consensual, not judicial. "In a procedural framework, there will be nothing for shareholders", warns Jean-Pierre Mattei.

Difficult indeed to know precisely what is this date may 15 deadline set by Eurotunnel: a simple step for Jacques Gounon objective, which prepares the General Assembly, or a maturity key provided in the alert procedure In fact, it is effective January 1, 2007, date on which the repayment of debt principal will be payable, that the concessionaire will be in a situation of default. "We don't know what is its flexibility, recognizes President of Arco," but if the alert is very advanced, can question the opportunity to appeal to ad hoc agents, on both sides of the channel, as was the case in previous restructuring."

In addition to financial terms, the legal debate promises to be a rare complexity. Theoretically, Eurotunnel, Franco-British company, is governed by the Treaty of Canterbury. The direction followed by the direction of the dealer appears rather to assert the French right, which is expected to disrupt the Anglo-Saxon financial.