Eurotunnel chief wins new mandate

The chairman of Eurotunnel, Jacques Gounon, was re-elected to the board last night with an overwhelming majority, giving him a clear mandate to take a tough line with creditors in talks to reschedule the ailing Channel Tunnel operator's £6.4bn debt mountain.

The chairman of Eurotunnel, Jacques Gounon, was re-elected to the board last night with an overwhelming majority, giving him a clear mandate to take a tough line with creditors in talks to reschedule the ailing Channel Tunnel operator's £6.4bn debt mountain.

His decisive victory with 98.27 per cent of the vote on a 45 per cent turnout came after the rebel shareholder Nicholas Miguet dramatically switched sides at the 11th hour to back M. Gounon rather than the company's former chief executive, Jean-Louis Raymond, who had mounted a rival bid for the chairmanship.

M. Miguet told Eurotunnel's annual meeting, held in a converted sports hall close to its Coquelles terminal in northern France, that it was "imperative" the company spoke with a single voice in forthcoming negotiations with creditors. "The point is not to fight with each other but to fight to save the company," he said.

The share tipster, convicted fraudster and sometime right-wing politician succeeded last year in ousting the entire Eurotunnel board. However, M. Miguet told M. Gounon yesterday morning he had decided to vote the 20 per cent of shares under his control in support of the current chairman.

Despite M. Gounon's decisive win, he faces a colossal uphill struggle to rescue the Tunnel from financial disaster and Eurotunnel from possible bankruptcy.

Creditors have made it clear that unless Eurotunnel agrees to some form of debt-for-equity swap, then they will use their powers of substitution to force the company into insolvency and bring in a new operator.

Despite this, M. Gounon has insisted that the creditors should write off £4bn of the debt they are owed without being offered anything in return, on the grounds that shareholders have already made enough sacrifices. Having now been confirmed as chairman, it remains to be seen whether M. Gounon now takes a more conciliatory line with creditors to avert Eurotunnel's bankruptcy, in which case shareholders would be left with nothing.

"We will fight as best we can to avoid any dilution but I cannot talk to you about the end of the negotiations when we have just opened them," M. Gounon told the 1,000-or-so shareholders crowded into the Salle Calquella. After the meeting, M. Gounon insisted he had not done any deal with M. Miguet to secure his support and refused to be drawn on whether he would seek to gain the support of creditors by offering them equity. "We have a common will be save the company and this will be the road to find a solution," he added.

Despite the failure of M. Raymond to unseat M. Gounon, he was also re-elected to the board as a non-executive director along with Eurotunnel's former deputy chief executive Hervé Huas, who had supported M. Raymond's bid for the chairmanship.

A source close to the creditors' committee said: "The electioneering is over, now the hard work begins. If M. Gounan wants a deal, there is going to have to be a debt-for-equity swap. Don't rule out him coming up with a proposal which forms the basis for negotiation." This year's meeting was far less stormy than last year's event in Paris when the entire board was ousted, but many shareholders still criticised M. Gounon and his colleagues over boardroom pay and corporate governance.

Eurotunnel had one piece of good news for its investors: because the venue for this year's meeting is municipally-owned, it cost just €300 for the day.