Groupe Eurotunnel S.A. (A)

Posted: 4 Jun 2009

See all articles by Stuart C. Gilson

Stuart C. Gilson

Harvard Business School - Finance Unit

Vincent Dessain

Harvard Business School - Finance Unit; European Research Center

Sarah Abbott

Harvard University - Business School (HBS)

Date Written: March 3, 2009

Abstract

In the summer of 2006 the chairman and CEO of Eurotunnel Group is faced with the decision whether to file for bankruptcy protection, after having failed to gain creditor approval of an ambitious out-of-court restructuring plan. The company, which has been attempting to restructure its debt and operations for the last ten years, faces a number of daunting challenges. Eurotunnel is jointly listed in the U.K. and France, and its shareholders, who are largely based in France, face the prospect of significant dilution under any restructuring plan. The current chairman and CEO has been with the company for only a year-and-a half, following a decade of senior management turbulence in which the company has seen nine different CEOs and chairmen. Eurotunnel's capital structure is staggeringly complex, and a large fraction of its debt has come to be held by U.S.-based hedge funds that specialize in investing in distressed companies. Finally, Eurotunnel's business is extremely challenging to value, and is faced with significant competition. If the current chairman/CEO decides to file for bankruptcy, he faces the additional choice whether to file for bankruptcy in the U.K. or in France, which take quite different approaches to restructuring troubled companies.

Suggested Citation

Gilson, Stuart C. and Dessain, Vincent and Abbott, Sarah, Groupe Eurotunnel S.A. (A) (March 3, 2009). HBS Case No. 209-062, Harvard Business School Finance Unit Paper No. 1413324, Available at SSRN: https://ssrn.com/abstract=1413324

Stuart C. Gilson (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
(617) 495-6243 (Phone)
(617) 496-8443 (Fax)

Vincent Dessain

Harvard Business School - Finance Unit; European Research Center ( email )

Boston, MA 02163
United States

Sarah Abbott

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,043
PlumX Metrics