Debt-laden tunnel operator Eurotunnel today said it would seek to write off more than half its debt, warning that it might run out of money by 2007 after posting what it called a disappointing 2004 loss.
The loss narrowed to £570m from £1.3 billion in 2003 due to lower interest payments and charges on the declining value of its assets.
But sales fell as the Anglo-French company said it had responded too slowly to tough price competition from ferry companies and low-cost airlines.
The operator of the undersea rail link between Britain and France said it was confident of restructuring its £6.4 billion debt before reaching a point of not being able to meet its financial obligations.
'If the debt is not drastically improved, Eurotunnel will not make it through the first quarter of 2007,' chairman Jacques Gounon told reporters, adding he would seek a write-off to reduce its debt to about €4 billion.
He said he was confident of reaching a deal with creditors to restructure the debt, but creditors were reported to have dismissed the move as unacceptable. Eurotunnel remains crippled by interest payments, which declined to £298m for the year from £318m, but were still almost double the group's operating profit of £171m.
