Eurostar today announced that it had received a £250m refinancing package from a group of banks in a bid to shore up its finances amid the Covid-19 pandemic.
The firm said that the deal, which comprises £50m shareholder equity, £150m shareholder guaranteed loans and £50m restructured existing loan facilities, would be guaranteed by majority shareholder SNCF, the French state rail group.
The cross-channel rail link has been calling for financial support for months, with passenger numbers having fallen to 95 per cent of pre-pandemic levels.
But UK ministers repeatedly demurred, with transport secretary Grant Shapps saying that the company was “not our firm to rescue”.
The UK sold its stake in Eurostar for £750m in 2015 under David Cameron’s government. It is now majority owned by French rail company SNCF, as well as two pension funds.
Commenting on today’s refinancing package, Eurostar chief executive 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.”
Export Development Canada, Barclays, Credit Agricole Corporate and Investment Bank, Société Générale, Natwest and BNP Paribas are the lenders behind the deal.
Adam Tyndall, programme director for Connectivity at London First, said: “The bailout will come as a relief for those who use the service, but should also been seen as a vote of confidence in London’s post-pandemic status as a top tier global city.
“Now that its immediate future is secure, governments across Europe must continue to work together to safely reopen travel, so that the capital can once again welcome visitors from the continent.”
Darren Caplan, chief executive of the Railway Industry Association (RIA), said: “It is positive to see a deal reached to keep Eurostar operating.
“This deal gives Eurostar and rail suppliers the confidence and certainty they need, to enable Eurostar to continue to deliver services, and support the wider UK economy, as we emerge from the Coronavirus pandemic and seek to help reboot the UK’s connectivity and economic recovery in the difficult months ahead.”
With France and Belgium currently on the UK’s amber list for travel, there is just one service a day currently running to each destination.
From 27 May, that will increase to two a day on the Paris-London route, with plans to hike that to three in June.