Eurostar back on track after striking deal with banks

EUROSTAR has struck a deal with its lenders to refinance hundreds of millions of pounds of debts, paving the way to reopen talks with ministers over financial support from British taxpayers.

A group of banks, including statebacked NatWest, have agreed to refinance £400m of loans that were due to be repaid this summer.

City sources said that Eurostar shareholders are prepared to do “heavy lifting” by injecting fresh capital into the business, but are hopeful of accessing state aid as part of a plan to preserve the operator’s long-term future.

UK support would be made on the basis that if Eurostar collapsed, Britain could be left without a rail link under the English Channel for up to two years, insiders added.

Grant Shapps, the Transport Secretary, has previously resisted calls to inject taxpayer cash to save the firm. Eurostar “is not our company to rescue” he said in February.

It is understood that Eurostar’s shareholders were told by government officials to first refinance its debts before they would entertain the idea of offering financial support.

One option could be for the UK to provide export guarantees similar to those provided to the likes of British Airways, Rolls-Royce and easyJet since the pandemic hit.

“Shareholders accept that they are going to have to do the heavy lifting,” said one deal insider. “I think it’s accepted that if one operator ceased to operate, it could easily take 18 months to two years to transfer to another.”

David Cameron sold the UK’s stake in 2015 for £750m.

The rail operator is now majorityowned by French rail firm SNCF alongside two pension funds.

Eurostar appealed to the Government for a bailout in January after a 95pc slump in passenger numbers during the pandemic left the business “fighting for survival”

Eurostar declined to comment.