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Eurotunnel on track to deliver extra equity
Jacques Gounon, boss of the restructured Groupe EuroTunnel, believes he is already two thirds of the way to delivering shareholders an extra 11pc of the equity in 2011 by exercising warrants.
The restructuring gives holders of the former Eurotunnel units, which were basically linked shares in EuroTunnel plc and EuroTunnel SA, an initial 13pc of the equity in new company, Groupe EuroTunnel.
Shares in Groupe EuroTunnel began trading yesterday, closing sharply lower in Paris at E0.45, compared with Friday's E0.79 close for the thinly traded EuroTunnel SA.
For each new share, ordinary shareholders also receive one warrant in the refinanced group whose debts have been slashed from £6.2bn to £2.84bn. The warrants are exercisable in 2011 and can potentially lift shareholders' equity to 24pc of Groupe EuroTunnel.
Mr Gounon said: "One hundred per cent exercise of warrants is a personal goal."
He said they were exercisable, on a pro-rata basis, depending on how much extra value EuroTunnel can generate by 2011 outside improving the profitability of its operations through the Channel Tunnel.
For all warrants to be exercised, EuroTunnel must create an additional £300m of value, Mr Gounon said, while also improving its financial performance. Last year EuroTunnel's trading profits rose 42pc to £220m, before interest costs, on revenues up 5pc at £568m.
Mr Gounon said a key part of this extra value could be generated by the use of past tax losses and a claim for the costs EuroTunnel incurred when asylum-seekers disrupted operations.
In May, the French government said it would allow the company to carry forward some E890m (£600m) of tax losses incurred by EuroTunnel SA during the three years from 2000-2002. Assuming a 30pc tax rate, using such losses could generate £200m extra value for Groupe EuroTunnel.
The business is also close to agreeing compensation over stowaway asylum-seekers, worth around £30m.
Aside from the warrants, Mr Gounon is keen to raise around E1bn of capital via a rights issue to buy back - at a 40pc premium - some of a £1.275bn convertible bond held by creditors before it converts.
He wants to move at the earliest opportunity in 13 months' time, allowing shareholders to increase their stake in the business - though at a price. Added to the exercise of the warrants, shareholders could come close to regaining half of the equity by 2011.
The restructuring gives holders of the former Eurotunnel units, which were basically linked shares in EuroTunnel plc and EuroTunnel SA, an initial 13pc of the equity in new company, Groupe EuroTunnel.
Shares in Groupe EuroTunnel began trading yesterday, closing sharply lower in Paris at E0.45, compared with Friday's E0.79 close for the thinly traded EuroTunnel SA.
For each new share, ordinary shareholders also receive one warrant in the refinanced group whose debts have been slashed from £6.2bn to £2.84bn. The warrants are exercisable in 2011 and can potentially lift shareholders' equity to 24pc of Groupe EuroTunnel.
Mr Gounon said: "One hundred per cent exercise of warrants is a personal goal."
He said they were exercisable, on a pro-rata basis, depending on how much extra value EuroTunnel can generate by 2011 outside improving the profitability of its operations through the Channel Tunnel.
For all warrants to be exercised, EuroTunnel must create an additional £300m of value, Mr Gounon said, while also improving its financial performance. Last year EuroTunnel's trading profits rose 42pc to £220m, before interest costs, on revenues up 5pc at £568m.
Mr Gounon said a key part of this extra value could be generated by the use of past tax losses and a claim for the costs EuroTunnel incurred when asylum-seekers disrupted operations.
In May, the French government said it would allow the company to carry forward some E890m (£600m) of tax losses incurred by EuroTunnel SA during the three years from 2000-2002. Assuming a 30pc tax rate, using such losses could generate £200m extra value for Groupe EuroTunnel.
The business is also close to agreeing compensation over stowaway asylum-seekers, worth around £30m.
Aside from the warrants, Mr Gounon is keen to raise around E1bn of capital via a rights issue to buy back - at a 40pc premium - some of a £1.275bn convertible bond held by creditors before it converts.
He wants to move at the earliest opportunity in 13 months' time, allowing shareholders to increase their stake in the business - though at a price. Added to the exercise of the warrants, shareholders could come close to regaining half of the equity by 2011.
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