Eurostar gets £250m refinancing; UK refuses to help

Eurostar, the cross-Channel rail service dedicated to routes connecting the UK with mainland Europe, has announced a refinancing agreement with its shareholders and banks — with no participation from the UK government.

The refinancing package of £250 million consists mainly of additional equity and loans from a syndicate of banks guaranteed by Eurostar shareholders.

The shareholders are French state railway group SNCF, Eurostar’s majority shareholder; Patina Rail LLP, a vehicle backed by Caisse de dépôt et placement du Québec (CDPQ) and funds managed by Federated Hermes; and Belgian state train operator SNCB.

The UK government sold its 40% stake in Eurostar in 2015 and it rejected approaches to help with the refinancing.

UK transport secretary Grant Shapps said earlier this year that Eurostar was “not our company to rescue.”

Eurostar CEO Jacques Damas said: “Everyone at Eurostar is encouraged by this strong show of support from our shareholders and banks which will allow us to continue to provide this important service for passengers.

“The refinancing agreement is the key factor enabling us to increase our services as the situation with the pandemic starts to improve.

“Eurostar will continue to work closely with governments to move towards a safe easing of travel restrictions and streamlining of border processes to allow passengers to travel safely and seamlessly.

“Their co-ordinated actions and decisions are crucial to the restoring of demand and the financial recovery of our business.”

Eurostar said that over the last year it experienced a “more severe decline in demand resulting from the global covid-19 pandemic than any other European train operator or competitor airline.”

“With this package of support, Eurostar will be able to continue to operate this vital link and meet its financial obligations in the short to mid-term,” said the group.

“Going forward, the focus will be on restoring demand for travel on Eurostar’s core routes between London and Paris, Brussels and Amsterdam, and on maintaining rigorous cost control to ensure the repayment of loans.

“Eurostar will increase the number of trains on its London-Paris route to two daily return services from the 27th May, and three per day from the end of June with a view to gradually increasing the frequency over the summer period as travel restrictions are eased.

“Eurostar remains committed to its role in reducing the impact of climate change, particularly in light of the COP 26 summit taking place in the UK in November this year, and the growing appetite of passengers for high-speed rail travel.

“This refinancing package secures Eurostar’s future as restrictions ease and travel begins to gradually resume.

“With the refinancing in place, Eurostar will have the opportunity to recover and successfully complete its merger with Thalys, as part of the Green Speed project.”

The refinancing package comprises £50 million of shareholder equity, £150 million shareholder guaranteed loans and £50 million restructured existing loan facilities.

Lenders include Export Development Canada, Barclays, Credit Agricole Corporate and Investment Bank, Société Générale, Natwest and BNP Paribas.

Eurostar is currently running one daily return service between London and Paris, and one daily return service between London and Brussels/Amsterdam.

There will be two daily return services between London and Paris from May 27, and three daily return services from the end of June with a view to gradually increasing the frequency over the summer period as travel restrictions ease.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.