IDEAS home Printed from https://ideas.repec.org/a/eee/eurman/v13y1995i2p201-211.html
   My bibliography  Save this article

The Eurotunnel rights issue part one: Strategy

Author

Listed:
  • Stonham, Paul

Abstract

In 1994, Eurotunnel, operator of the Channel Tunnel between Britain and France, announced it was launching an £858 million gross rights issue of equities to cover its cash requirements and secure its financial future. At the time, the issue was one of the largest in British corporate history, and can be considered a skilful piece of financial engineering. All its financial manoeuvres were undertaken in the face of zero revenues up to May 1994, and no dividends were expected to be paid until the year 2004. Yet Eurotunnel persuaded the financial community to invest in 324 million units (twinned shares). In Part One of this Case Study, Paul Stonham documents Eurotunnel's strategy in raising both equity and debt in a refunding exercise in 1994 and its management and decision-making on such matters as: debt/equity mix, cost of capital, debt refunding, timing and size of rights issue, equity and loan warrants, interest rate and currency risk, and banking preconditions.

Suggested Citation

  • Stonham, Paul, 1995. "The Eurotunnel rights issue part one: Strategy," European Management Journal, Elsevier, vol. 13(2), pages 201-211, June.
    • Handle: RePEc:eee:eurman:v:13:y:1995:i:2:p:201-211
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/0263237395000089
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Poitras, Geoffrey, 2002. "Short sales restrictions, dilution and the pricing of rights issues on the Singapore Stock Exchange," Pacific-Basin Finance Journal, Elsevier, vol. 10(2), pages 141-162, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eurman:v:13:y:1995:i:2:p:201-211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/115/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.