Remember the tunnel from England to France under the English Channel? An engineering marvel when it was completed. Years and years in the speculation, design and finally building.
The operators of the tunnel have been forced to ask for bankruptcy protection. Revenues have never been close to projections and traffic has never reached estimates.
Eurotunnel last night warned it could cease trading in January after last-ditch talks with a group of creditors collapsed in the early hours and it applied for court protection from bankruptcy. However, the company was accused of setting false deadlines.
Jacques Gounon, chief executive, warned it had only until the end of September to reach a comprehensive deal with creditors and that customers could only be sure of booking shuttles through the channel tunnel until Christmas. But it would be "business as usual" until then.
Mr Gounon, who made a "final, ultimate" proposal to cut the company's £6.2bn debt to £2.65bn, launched a savage attack on Deutsche Bank's City-based investment bankers for rejecting his plan and "jeopardising" Eurotunnel's survival.
He warned that the bank's shareholders could turn on it over damage to its image. "I fail to understand how an institution such as Deutsche Bank has maintained its unreasonable demands without taking into account the consequences on the 2,300 employees and 800,000 shareholders of Eurotunnel."
Someone present at the meeting said considerable progress had been made – not least by Deutsche – but it had not been possible to reach an agreement "due to the deadline imposed by Mr Gounon". Sources made plain that senior creditors had not agreed to his latest plan and stood by the original deal of mid-May to cut debt by 54% to £2.9bn.
Mr Gounon, however, accused Deutsche of failing to give any reason for rejecting his plan which also included a hybrid bond of £1.275bn convertible into equity. He accused the bankers of simply walking out. "My plan is very close to the requests of the bondholders they represent and has been accepted by the majority of creditors."
But Mr Gounon indicated that Deutsche and the so-called junior bondholders, who are owed £1.9bn, objected to his proposal to retain the 13% stake held by shareholders, including 150,000 in the UK, and found it "too generous".
I think this is one of those projects too long in the planning, too slow in the building. In the years that intervened, technology caught up with the concept and it was obsolete before it was complete. Too bad in a way.
