Eurotunnel not doing so well

On wednesday, shareholders of the French side of the Eurotunnel corporation
voted to oust the board of the company.

The company has serious debt problems and has not met the predicted volumes of
customers necessary to pay back the debt.

Probably a victim of low cost carriers.

So this does not bode well for the trans-atlantic tunnel being built (
www.atlantictunnel.com) :-)

The company has serious debt problems and has not met the predicted
volumes of
customers necessary to pay back the debt.

Probably a victim of low cost carriers.

So this does not bode well for the trans-atlantic tunnel being built (
www.atlantictunnel.com) :-)

But it's *already* built! According to the website, the two sides of the
tunnel met in 1986. Seems like it's taking a very long time to do the
finishing touches...

--Mike-- Chain Reaction Bicycles
http://www.ChainReactionBicycles.com

Mike Jacoubowsky wrote:
But it's *already* built! According to the website, the two sides of the
tunnel met in 1986. Seems like it's taking a very long time to do the
finishing touches...

They borrowed a lot of money to dig the tunnel. They expected certain revenu
levels in order to not only pay the loans back, but also generate a profit
back to shareholders.

But because it costed much more to build, the loan payments (debt servicing)
costs a lot more and thus the Eurotunnel company doesn't have have enough cash.

interesting note: Eurostar is a totally different/separate corporate entity
who is a customer of Eurotunnel (they pay fees to use the tunnel).

The french board has been changed. They hope to be more agressive in
restructuring the debt to reduce payments and make the tunnel viable AND/OR
obtain financing from governments.

And Eurostar representative stated that existing constracts do not allow
Eurotunnel to raise their rates, and said that it would be stupid to raise the
rates since these would have to be passed on to passengers and make the
services less competitive.

On Thu, 08 Apr 2004 03:53:03 -0400, nobody wrote:



And Eurostar representative stated that existing constracts do not allow
Eurotunnel to raise their rates, and said that it would be stupid to raise the
rates since these would have to be passed on to passengers and make the
services less competitive.

Eurotunnel have already priced themselves out of the market. I need to
go to England in July, to be there for 8 days, and I need a car with
me. Eurotunnel price is ± €500, easyjet + Avis is ± €350.
--==++AJC++==--

AJC wrote:

On Thu, 08 Apr 2004 03:53:03 -0400, nobody wrote:



And Eurostar representative stated that existing constracts do not allow
Eurotunnel to raise their rates, and said that it would be stupid to raise the
rates since these would have to be passed on to passengers and make the
services less competitive.


Eurotunnel have already priced themselves out of the market. I need to
go to England in July, to be there for 8 days, and I need a car with
me. Eurotunnel price is ± €500, easyjet + Avis is ± €350.
--==++AJC++==--

Would it be cheaper for maybe a car and 4 people?

On Thu, 08 Apr 2004 09:53:01 GMT, mtravelkay wrote:



AJC wrote:

On Thu, 08 Apr 2004 03:53:03 -0400, nobody wrote:



And Eurostar representative stated that existing constracts do not allow
Eurotunnel to raise their rates, and said that it would be stupid to raise the
rates since these would have to be passed on to passengers and make the
services less competitive.


Eurotunnel have already priced themselves out of the market. I need to
go to England in July, to be there for 8 days, and I need a car with
me. Eurotunnel price is ± €500, easyjet + Avis is ± €350.
--==++AJC++==--

Would it be cheaper for maybe a car and 4 people?

Yes. If 3 people don't mind squeezing in to a group B then that is
still cheaper, 3 Eurotunnel wins.
--==++AJC++==--

On Thu, 08 Apr 2004 03:53:03 -0400, nobody wrote:

Mike Jacoubowsky wrote:
But it's *already* built! According to the website, the two sides of the
tunnel met in 1986. Seems like it's taking a very long time to do the
finishing touches...

They borrowed a lot of money to dig the tunnel. They expected certain revenu
levels in order to not only pay the loans back, but also generate a profit
back to shareholders.

But because it costed much more to build, the loan payments (debt servicing)
costs a lot more and thus the Eurotunnel company doesn't have have enough cash.

interesting note: Eurostar is a totally different/separate corporate entity
who is a customer of Eurotunnel (they pay fees to use the tunnel).

The french board has been changed. They hope to be more agressive in
restructuring the debt to reduce payments and make the tunnel viable AND/OR
obtain financing from governments.

And Eurostar representative stated that existing constracts do not allow
Eurotunnel to raise their rates, and said that it would be stupid to raise the
rates since these would have to be passed on to passengers and make the
services less competitive.

More to the point, these jerks hope they'll force governments to subsidize
them.

The whole setup is nonsense, BTW. In the end, only real solution is
bankruptcy, and a new outfit operating the tunnel, starting with a clean
balance sheet. With both debtors and shareholders left hanging.

"nobody" wrote in message
...
Mike Jacoubowsky wrote:
But it's *already* built! According to the website, the two sides of
the
tunnel met in 1986. Seems like it's taking a very long time to do the
finishing touches...

They borrowed a lot of money to dig the tunnel. They expected certain
revenu
levels in order to not only pay the loans back, but also generate a profit
back to shareholders.

Most of whom are French small shareholders (80%), who seemed to regard
participation in the original offer as a patriotic act, as opposed to the
more pragmatic British investors, who never though it was a sensible
investment in the first place.

devil muttered....



More to the point, these jerks hope they'll force governments to
subsidize them.

If you call it "Airbus" would subsidy be OK?


The whole setup is nonsense, BTW. In the end, only real solution is
bankruptcy, and a new outfit operating the tunnel, starting with a
clean balance sheet. With both debtors and shareholders left hanging.

So we leave the original investors - most small, many French and likely to
be substantially bitter - holding an empty bag, throw out a Board and
a handful of overpaid top executives (all mobile, well off and without much
difficulty able to find new jobs and directorships), yet continue to reward
the managers and workers with high salaries, perks, etc., when they are
certainly among the ones who screwed the pooch....

In a better world, power/telephone poles leading up to the UK and French
entrances would be decorated with the hanged and rotting corpses, ravens
a'picking at their eye sockets, of the promoters (and brokers/stock
peddlers) who made princely sums on the original deal.

We simply don't place much reliance on accountability these days. Puir
Auld Admiral Byng would simply stroll off to comfortable retirement these
days, and the concept of "as an example for the others" is sadly forgotten.

Why, the securities/stock market would not be nearly so volatile if the
entrances to the City of London were decorated with the heads (regularly
replaced with fresh and dripping) of a few conniving brokers/promoters.

TMO

On Fri, 09 Apr 2004 09:49:51 -0500, Olivers
wrote:

devil muttered....
More to the point, these jerks hope they'll force governments to
subsidize them.

If you call it "Airbus" would subsidy be OK?

The french or EU governments may well be happy to do so, but Maggie
made sure the treaty banned it.

So we leave the original investors - most small, many French and likely to
be substantially bitter

Yes, they took the risk, that's the whole point of investing it's not
just free money you know?

Jim.