Goldman Sachs Infrastructure Partners has become the biggest shareholder in Eurotunnel after deciding to swap deferred equity securities for a stake in the company.
Goldman’s infrastructure fund will hold a 21.21 percent stake in the Channel Tunnel rail link operator after opting to exchange its subordinated deferred equity securities for shares in Eurotunnel. The final redemption date for the securities is in September 2010.
Eurotunnel chairman and chief executive Jacques Gounon hailed Goldman’s arrival as principal shareholder as “excellent news for the group”, adding that “it will be a real asset in the pursuit of our upcoming strategic developments.”
However, Eurotunnel said in a statement that the conversion of outstanding securities and certificates in the company would result in Goldman Sachs Infrastructure Partners’ holding being diluted to 15.22 percent.
Earlier this year Eurotunnel reported a loss of €8 million for the first half of 2009, which it attributed largely to the effects of a fire in the tunnel in September 2008 on car and truck usage. On June 30 Eurotunnel had cash reserves of €257 million.
Last week Eurotunnel teamed up with French rail operator SNCF to acquire Veolia Cargo, the European private rail freight operator. SNCF has taken over Veolia Cargo’s German, Dutch and Italian rail companies, while Eurotunnel has acquired the group’s French operations. The value of the transaction was not disclosed. Veolia Cargo last year reported revenues of €188 million.