20/02/2008 - 17:45

The board of directors of Groupe Eurotunnel SA has decided that the conditions are satisfied for the Company to be able to proceed with the raising of new funds to finance the early cash redemption of the NRS II which were issued by Eurotunnel Group UK PLC (EGP) in connection with the restructuring as provided for in the safeguard plan. 

The objectives of this transaction, which aims to raise the necessary funds for the complete redemption of the NRS II (i.e., approximately 1.7 billion euros), are the following: 

  • to realise savings on the financing costs of the NRS II (savings of approximately 68 million euros for a full year, excluding the return payable on the subordinated deferred equity securities (SDES)) and create additional headroom which could allow the company to consider the distribution of a first dividend;
  • to reach more rapidly than expected the stage at which the definitive number of shares comprising the share capital is known and stabilised;
  • to facilitate the increase in the existing shareholders’ proportionate share of the company’s equity, by completing the early redemption of at least approximately one half of the NRS II before the redemption in shares of the first tranche of the NRS I scheduled for July 2008;
  • to encourage shareholder loyalty by granting new or existing shares of the Company, or their equivalent value in cash, to investors who subscribe for securities in connection with one of the two phases described below1 and hold them for three years.

In order to ensure the success of this transaction in an environment characterised by the instability of financial markets, the board of directors has decided, given the total amount to be raised, to split this transaction into two phases: 

  • first phase: an issue of SDES for 800 million euros. This issue, without preferential subscription rights but with a priority subscription period for existing shareholders, is already fully underwritten;
  • second phase: a capital increase launched subsequently to the SDES issue and as soon as possible based on market conditions, of a maximum amount of approximately 900 million euros, by way of the allotment for free of share warrants (BSA) to shareholders, entitling them to subscribe for new ordinary shares.

The terms and conditions of the first phase are set out below.

The terms and conditions of the second phase will be specified in due course in a separate securities note which will be approved by the AMF.  The decision to launch the second phase of the transaction depends in particular on market conditions.2

Jacques Gounon, Chairman of the board of directors and Chief executive officer of Groupe Eurotunnel SA, stated: 

“The financial stability of Groupe Eurotunnel SA and the assets intrinsic to the Concession of the Channel tunnel today enable us to accelerate our progress by raising in a first phase 800 million euros, fully underwritten, with a subsequent additional capital increase also planned.  The early redemption of part of the NRS II sets in motion a virtuous circle for the benefit of our existing shareholders.”