CITY AND SUBURBAN
Which of the twin bores is under water? Yes, it's Lightatendoftunnel
CHRISTOPHER FILDES
Insider trading is the sign of an efficient market, so I have been encouraged to see Eurotunnel's shares bounce. From their low point in April they are up by more than half. I take this to reflect the view in France, where most of the shares are held, that this unique company with dual nationality will be reconstructed under French rules — as opposed to London rules, which let the creditors come first. That difference would be decisive for Eurotunnel, which owes its creditors in the banks a little matter of £9 billion. After much loud grumbling about this difficult customer of theirs, they have now fallen silent — a deal cannot be too far away. They will cancel some of their loans to Eurotunnel or convert them into shares, but they have never wanted to be owners and operators of the world's largest subma- rine mushroom farm, and I now expect that they will settle for owning significantly less than half the company. Someone, as I keep saying, will make money out of this project one day, and the new shareholders might even find that they have come in at the right moment. I wish I could feel the same confi- dence in the prospects for Lightatendoftun- nel, formerly UK plc. It now owes its credi- tors £329 billion, its debt is compounding, and its ebullient finance director has persis- tently underestimated the amount he needs to borrow. He had to raise more than £100 billion since he took office and this week's figures suggest that he is overshooting once again. He might, I suppose, try to reach an accommodation with his creditors. Antici- pating this, he would want to make Conti- nental rules apply to Lightatendoftunnel, and he certainly seems keen on this idea. Alternatively, he could seek a bid from a more soundly financed business, such as Eurotunnel.
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