Goldman Sachs becomes largest shareholder in Eurotunnel

US investment bank, Goldman Sachs, has taken a 20% stake in struggling Eurotunnel and as a result has become the Channel Tunnel operator’s largest shareholder.

The holding will give Goldman Sachs a major say over the company’s future direction. The investment bank has been left holding most of an €800 million (£613 million) deferred share placing it underwrote through its infrastructure fund.

It is thought it has ended up with about €650 million of the €744 million taken up by institutional investors. The remainder was bought by existing shareholders.

The placing was part of a major refinancing package by Eurotunnel chairman and chief executive, Jacques Gounon, after the firm was rescued from collapse last year.

The deferred stock, which will be listed in Luxembourg, is convertible after 18 months into new Eurotunnel shares, with each €1,000 unit worth 103.8 Eurotunnel shares. Holders are incentivised, however, to postpone the conversion for 30 months, when they receive a loyalty bonus of extra shares.

A source close to the transaction said I don’t think it was a case of Goldman failing to shift it. They know what these markets are like and were prepared to take the lion’s share.

Goldman Sachs would have worked on the basis that they were going to get most of it. The business is trading well and it’s a solid investment for an infrastructure fund, according to Mark McVicar at Dresdner Kleinwort.

Jacques Gounon thanked investors who, in the midst of a markets crisis, have put their trust in Eurotunnel.

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