Eurostar and Thalys trains

EUROPE: Cross-Channel high speed train operator Eurostar has announced a £250m refinancing agreement with its shareholders and banks, which it said would enable it to continue to operate services and meet its short to mid-term financial obligations.

The refinancing package announced on May 18 comprises £50m of shareholder equity, £150m of shareholder guaranteed loans and £50m of restructured existing loan facilities. The lenders include Export Development Canada, Barclays, Credit Agricole Corporate & Investment Bank, Société Générale, Natwest and BNP Paribas.

London St Pancras Eurostar check-in empty during the coronavirus pandemic 20200831

Eurostar said the travel restrictions imposed as result of the coronavirus pandemic meant that it had experienced a more severe decline in demand ‘than any other European train operator or competitor airline’. With ridership falling by 95%, services were cut back to one return train per day on each of the London – Paris and London – Brussels – Amsterdam routes, with many of its staff being furloughed.

Eurostar said its focus would now be on restoring demand on its core routes from London to Paris, Brussels and Amsterdam; maintaining rigorous cost control to ensure loan repayments; and completing the planned merger with Thalys under the Green Speed project to create ‘one unified European high speed rail company’.

Eurostar Velario passenger boarding

The operator plans to add a second daily London – Paris return service from May 27, rising to three per day from the end of June. A gradual increase in frequency is envisaged over the summer period as travel restrictions are eased. No timescales were announced for strengthening the Brussels and Amsterdam route.

Strong show of support

Eurostar’s shareholders are French national railway group SNCF (55%), the Patina Rail consortium of Canadian investor Caisse de dépôt et placement du Québec (30%) and funds managed by the Infrastructure team of Federated Hermes (10%), and Belgian national passenger operator SNCB (5%).

London St Pancras station coronavirus poster

‘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’, said CEO Jacques Damas.

‘The refinancing agreement is the key factor enabling us to increase our services as the situation with the pandemic starts to improve. Eurostar will continue to work closely with governments to move towards a safe easing of travel restrictions and streamlining of border processes to allow passengers to travel safely and seamlessly. Their co-ordinated actions and decisions are crucial to the restoring of demand and the financial recovery of our business.’

General Secretary of the UK’s TSSA trade union Manuel Cortes welcomed the refinancing agreement, saying ‘we have been saying for many months that Eurostar is far too important to fail. The majority of Eurostar jobs are British jobs and many more rely on this vital service’.

The UK government sold its stake in Eurostar to Patina Rail in 2015, and declined to provide support for the operator during the pandemic as it believed this was a matter for the shareholders.