Eurostar wins financing to escape bankruptcy

Train operator Eurostar said Tuesday it had secured a 290-million-euro rescue package to keep afloat while waiting for Covid-19 travel curbs to be lifted.

The company, which had been on the verge of bankruptcy, said the capital injection provided by its shareholders, including majority shareholder French rail operator SNCF, and associated bank loans would “secure Eurostar’s future”.

Eurostar, which operates the trains that run under the English Channel, has lost nearly all its passengers to the coronavirus pandemic.

Only a single Eurostar train is currently running daily between London and Paris and London and Brussels.

Unlike national flag carriers, which have been bailed out by their governments, Eurostar, which is often seen by the French as British and by the British as being French, failed to secure a state rescue package.

The London-based company had been under pressure to secure a cash injection by the start of June.

Its 250-million-pound ($352 million) refinancing package is made up of 50 million pounds in new shareholder equity, 150 million pounds in shareholder-guaranteed loans and 50 million pounds in restructured loans.

Eurostar said the deal would help it meet its financial commitments in the “short and medium-term”.

The head of SNCF’s travel division, Christophe Fanichet, called the financing “a major step to guarantee the future of Eurostar and of travel between the continent and Britain”.

The company plans to start running more trains between Paris and London over the spring and summer.

It said from May 27 it will run two daily return trips between London and Paris, and three from the end of June.

The company has meanwhile embarked on a drastic cost cutting drive and placed its staff on partial unemployment.

It is also pursuing a plan to merge with French-Belgian operator Thalys which runs a network of high-speed connections between cities in Belgium, France, Germany and the Netherlands to create additional synergies.

The group is 55 percent owned by the SNCF, 30 percent by Canadian institutional fund manager Caisse de depot et placement du Quebec (CDPQ), 10 percent by Britain-based fund Hermes Infrastructure, and five percent by the Belgian railway SNCB.