THE Franco British Eurotunnel consortium may ask a French court today to appoint an official mediator for its debt crisis, in what could prove a key turning point in its financial problems.
The mediator would be asked to arbitrate in the dispute between the Channel Tunnel operator and its main creditor banks, to whom it stopped paying interest on its debt five months ago.
Under French law, the mediator would be authorised to hold talks with Eurotunnel, its creditors and the French and British governments. Until now talks have been carried out directly between Eurotunnel and its banks.
Eurotunnel stopped interest payments on its principal 62 billion franc (about $12 billion) debt last September, and has since failed to reach a compromise with its banks over the issue.
On Friday rumours about the outcome of the board of directors' meeting and specifically the possibility of a mediator being appointed, caused it to surge by 3.2 per cent on the Paris bourse.
A key issue at stake is the conversion of debt interest into shares by banks owed money by Eurotunnel, under which they could acquire about half of the company, according to recent media reports.
The daily Le Monde reported last week that talks between Eurotunnel and its creditor banks centred on the precise percentage of the company which would end up owned by the banks.
