Eurotunnel yesterday set the terms for the restructuring of its £6.2 billion debt mountain and said talks with its creditors would last eight months.
Bosses of the Channel Tunnel operator unanimously voted to ask its creditors to waive their right to claim a default on debt repayments.
A dispute over the proportion of creditors' advisory fees that Eurotunnel would have to cover was settled at a meeting in Paris. Eurotunnel said its major creditors had agreed to lower the fees and this had been approved by a majority of its board.
Eurotunnel needs its lenders to approve the request for a waiver so it can proceed to formal talks about a renegotiation of the debt, which they are officially entitled to regard as a default on repayments.
The company said a favourable reply would enable talks to begin "with the intention of reaching a financial arrangement ensuring the future of the group whilst maintaining shareholder interests".
Chairman Jacques Gounon will take responsibility for restructuring the debt with support from Herve Huas, who has stood down as deputy chief executive.
Mr Gounon said: "The convergence of positions between Eurotunnel and the ad-hoc committee of major creditors is positive. The board will continue to work to secure the group's future."
An eventual debt renegotiation is likely to take the form of a debt-forequity swap that would dilute investors' existing stakes, potentially leaving them with nothing.
Eurotunnel's agreement with its creditors ultimately allows them to call in the outstanding debt and seize control of the company.
The group's creditors, who include MBIA, HSBC and the European Investment Bank, have been pressing it to speed up progress.
Eurotunnel is under pressure to agree a deal with the lenders before the end of this year, when it has to start paying all the interest on its debt in cash.
At the moment, it has an agreement allowing it to issue convertible bonds for any interest it is unable to pay.
Frustration at the company's slow rate of progress in sorting out its problems caused last April's ugly boardroom coup in Paris, when rebel shareholders succeeded in replacing Eurotunnel's entire Anglo-French board with a new, all-French team.
However, anger at the new management's apparent inability to move things forward has grown, sparking the resignation last month of chairman Jacques Maillot.