A Paris commercial court has granted Eurotunnel protection from its creditors, enabling the operator of the Channel Tunnel to freeze payments on its debt mountain of €9 billion.
Eurotunnel, which operates twin rail tunnels between France and England, asked the court for protection three weeks ago while warning that otherwise it would be heading for liquidation procedures at the end of September.
It made the application after two days of talks with creditors had failed to produce a deal to halve and restructure its debt.
The group is to benefit from a safeguard procedure, similar to US Chapter 11 bankruptcy law, which was introduced in France at the beginning of the year to help companies avoid declaring bankruptcy.
Eurotunnel amassed its enormous debt pile during the construction of the Channel Tunnel rail link, which was built in the 1980s and 90s without public financing on the insistence of then British prime minister Margaret Thatcher.
