Plans For Second Eurotunnel

Eurotunnel PLC expects to have a proposal for a second Anglo-French transportation link ready by the end of the year, the company said Wednesday.

Further details will be announced within the next few months, Eurotunnel officials said at a press conference called to outline a recent deal to reduce the company's debt.

Eurotunnel operates the 31-mile tunnel beneath the English Channel that links France and England by rail. It holds the right to operate the existing linkage until 2086. The company has not said whether the new tunnel will be for trains or cars.

Under the 1986 legislation setting up the link, the company is required to produce proposals for a second tunnel by 2000.

Eurotunnel's debt deal involved the repurchase of its own bonds at a substantial discount to their face value. Eurotunnel spent $235 million buying back debt securities with a face value of $521 million by taking advantage of a downturn in the market for such bonds.

The buyback is expected to add about $286 million to net income for the second half of the year, the company said.

Eurotunnel will finance the deal with proceeds from a new issue of shares worth up to $263 million. The company initially will offer the shares to existing shareholders. After buying back the debt, Eurotunnel still will owe more than $11.5 billion.

Before the announcement, trading in the company's shares was suspended. Eurotunnel is jointly listed on the London and Paris stock exchanges.