Eurostar is in urgent talks with banks to avoid collapse as the June deadline to repay a £400m ($552m) mountain of debt approaches.
The company is said to be in talks with a group of its lenders, including NatWest (NWG.L) to secure lifeline funding as French and British governments resist bailouts, the Telegraph reports.
While there is an option to extend for another 12 months, this requires Eurostar to adhere to strict covenants, including maintaining a minimum cash balance of £35 million.
Eurostar is focusing its efforts on restructuring its loans after several weeks of lobbying with ministers from both countries failed, sources told the newspaper.
In February, Transport Secretary Grant Shapps told ministers that the government “dearly wants Eurostar to survive”, but stressed that “it is not our business”. He added that “things like export finance in the UK” could be an option for the company.
Watch: Eurostar Rail Service facing financial difficulties due to COVID-19
The coronavirus pandemic has affected all modes of public transport and the global travel industry. As a result, the operator’s passenger numbers have fallen by 95% since March 2020 compared to the previous year.
There is currently only one train in each direction between London and Paris. It operated more than 50 daily services before pre-pandemic, and two trains per hour during peak times.
The channel tunnel operator has struggled for the past year to survive amid ever-changing travel policies and widespread coronavirus lockdowns. In January, the company warned that it was in a “very criticalis on track for financial ruin.
In 2015, Britain sold its stake in the operator to France for £750 million. The French government has pumped €200 million (£178 million) into Eurostar to keep it afloat during the crisis.
The French state rail company Société nationale des chemins de fer français (SNCF) owns 60% of the company.
Eurostar was rejected by the Treasury in November when it announced subsidies to major airports of up to £8 million each.
The train company said at the time: “The new airport fare reduction scheme puts Eurostar at a direct disadvantage compared to its airline competitors.
“Eurostar must fight for its survival against a 95% slump in demand, while aviation has received more than £1.8 billion in support through loans, tax deferrals and financing.”
Founded in 1994, the company has been credited with reducing CO2 emissions. Since the start of the services, air traffic between London and Paris has more than halved.
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