Investors are getting on - again - on the train.
The cross-Channel company Eurostar, a 55% subsidiary of SNCF, announced Tuesday, May 18 that it had reached a financing agreement of 250 million pounds (290 million euros) with its shareholders and its banks, allowing it to escape the bankruptcy.
It includes the contribution of 50 million pounds of equity by its shareholders, a loan of 150 million guaranteed by these same shareholders and 50 million of existing credit facilities restructured.
To read also: The Eurostar plays its survival
Bankruptcy avoided
The company has seen its revenues fall by 95% with the Covid-19 crisis. Eurostar, which only provides one round trip Paris-London and one Paris-Brussels per day at the moment, absolutely had to find new money before the end of May-beginning of June to avoid filing for bankruptcy. This agreement "
secures the future of Eurostar in a context of lifting restrictions on travel and gradual resumption of activity,
" said the company in a press release.
The company has embarked on a downsizing operation, reducing its wage costs as much as possible, renegotiating its contracts with its suppliers and postponing the maturity of certain loans it had to repay.
The shareholders have for their part already agreed to lend 210 million euros to the company.
Read also: The colossal public cost of the SNCF
At the heart of a Franco-English quarrel
The company suffers from being perceived in the United Kingdom as a French public company, while it is often seen in France as a British company since it is based in London.
It has failed to benefit from direct aid or loans guaranteed by the states.
The company must increase its offer to two daily round trips on the London-Paris line, then with a third service from the end of June. It "will increase the frequency gradually over the summer, as the expected relaxation of travel restrictions," the statement said.