Banks provide pounds 303m cushion for Eurotunnel

EUROTUNNEL's banks will provide further lending facilities of up to pounds 303m if the project runs short of cash - on top of the pounds 1.6bn refinancing completed last week, writes John Willcock.

The prospectus for Eurotunnel's pounds 858m rights issue also lists the heavy fees it had to pay its banks for the refinancing. The new tranche of pounds 693m in senior debt carries a facility fee of pounds 10.3m.

Further costs include an arrangement fee of pounds 1m, annual fees of pounds 200,000 to Eurotunnel's four agent banks and a commitment fee of 1 per cent a year on the unutilised part of the loan.

The 220 banks in Eurotunnel's global syndicate also receive pounds 10,000 each for voting on the modified loan agreement, whether they decided to provide further funds or not. As reported in yesterday's Independent, 150 of the banks did not agree to more loans.

Analysts say the true cost of the project will rise to more than pounds 11bn.