Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

Jihadists attack U.N. base in Mali

Read more

MEDIAWATCH

Assange #ArbitrarilyDetained

Read more

THE WORLD THIS WEEK

Part 1: Julian Assange, Brexit

Read more

FRANCE IN FOCUS

Migrant crisis: Is Calais the dead end on the migrant trail?

Read more

FOCUS

Transgender children: Embracing the transition process

Read more

ENCORE!

Phil Collins remastered

Read more

PEOPLE & PROFIT

Taking a slice: The challenge of taxing multinationals

Read more

FASHION

Haute couture: Chains and Napoléon’s sisters on the Parisian runway

Read more

#THE 51%

Afghanistan’s first lady

Read more

Eurotunnel sees the light

Latest update : 2008-04-08

Long beset by financial problems, the rail company Eurotunnel has registered its first ever profit. Chairman Jacques Gounon has announced he will pay a first dividend to shareholders in 2009. Economics journalist Reuben Easey analyses.

It was with great satisfaction that Jacques Gounon, Eurotunnel’s CEO, announced Tuesday’s figures. He says the ‘new’ Eurotunnel is nothing like the one of old, which struggled almost from the moment it left the station.

Construction costs for the tunnel were around 16 billion euros, more than double the initial estimates – and at the insistence of the then British Prime Minister Margaret Thatcher, ‘not a penny’ of public money was used to finance it.
Consequently, the company has been forever burdened by enormous debts to the banks which put up the cash.

Moreover, estimates of passenger numbers proved to be hugely over-optimistic. But the major factor which has allowed it to finally start turning a profit is the enormous restructuring of its debt which took place in 2006.

Eurotunnel was able to wipe out its debts by repaying the banks in the form of shares. This has placed Eurotunnel on a far more even footing. The upturn in fortunes is also thanks to increased traffic through the tunnel, both on its freight service, and the passenger trains which connect London’s Saint Pancras to Paris’ Gare du Nord.

Those who have suffered most have been the firm’s small shareholders, the vast majority of them French. Having seen the value of their investments dwindle to virtually nothing, this is at last something for them to cheer about.  

Date created : 2008-04-08

COMMENT(S)