The cross-Channel company Eurostar announced on Tuesday that it had reached a financing agreement of 250 million pounds (290 million euros) with its shareholders and its banks, allowing it to escape imminent bankruptcy .
Eurostar, which only operates one round trip Paris-London and one Brussels-London per day at the moment, absolutely had to find new money before the end of May-early June to avoid filing for bankruptcy.
Eurostar said that since the start of the pandemic it had “experienced a more severe decline in demand resulting from the global Covid-19 pandemic than any other European train operator or competitor airline”.
The company suffers from being seen in the UK 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 agreement reached “secures the future of Eurostar amid the lifting of travel restrictions and the gradual resumption of activity,” the company said in a statement. “The support measures decided on today will enable it to meet short- and medium-term financial obligations“.
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 restructured credit facilities.
In addition to the French majority owner SNCF which has a 55% share, Eurostar is 40% owned by the Patina Rail consortium – 30% made up of the Caisse de Dépôt et Placement du Québec and 10% by the British fund Hermes Infrastructure – and 5% by the Belgian SNCB.
Eurostar said it will start ramping up daily trains between London and Paris, Brussels and Amsterdam later this month. The company will increase its offer to two daily round trips on the London-Paris line on 27 May, then with a third service from the end of June, but does not give a timeline for expanding its single daily return journey between London and Brussels.
It will “increase the frequency gradually over the summer, as travel restrictions are expected to ease,” the statement said.
Eurostar also said it is also pushing ahead with its planned merger with Thalys, as part of the Green Speed project.
Source: Business AM