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CreateTime:2008-04-30 Editor:liaoyan
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ENGLISH Channel tunnel operator Groupe Eurotunnel SA said yesterday that it is seeking to raise more than 900 million euros (US$1.4 billion) in the second stage of a capital increase designed to pay off creditors early.
Executives trumpeted the move as a further sign that the tunnel operator, once heavily burdened by debt, is regaining control of its future after its first-ever profit in 2007.
As part of its debt repayment plans, Eurotunnel announced a two-phase 1.7 billion euro refinancing in February.
In the first phase, 800 million euros was raised in a convertible bond issue underwritten by Goldman Sachs. The cash was intended to be used to buy back convertible securities issued to bondholders, reducing the dilution of stock.
In the second phase, announced yesterday, Eurotunnel is seeking to raise funds directly from shareholders in a more traditional rights issue - valued at 915.4 million euros.
"On the strength of our good 2007 results, confirmed in the first quarter and by the success of our first capital raising in February, GET is launching the second phase of its capital increase," said chairman Jacques Gounon, referring to the acronym for Groupe Eurotunnel SA.
The move will allow Eurotunnel to save money on financial charges and "give us further room for maneuver to control our future," he said in the statement.
The rights issue, underwritten by a syndicate of five banks, will take place until May 29. The subscription price will be set at 8.75 euros per share, or a 28-percent discount to Friday's closing price.
Eurotunnel lurched from one debt crisis to another until it reached a restructuring deal with shareholders last year allowing it to cut its 9.2 billion euro debt to 4.16 billion euros by repaying banks in the form of shares.
The deal created a new company, Groupe Eurotunnel SA, and diluted existing shareholders' stake to 13 percent. The vast bulk of the debt was held by financial institutions, but a large number of small shareholders bought shares and they have suffered the most.
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