Channel Tunnel operator Eurotunnel unveiled a long- awaited plan to tackle its £6.2 billion debt mountain.
But the company warned that it would be forced into bankruptcy if shareholders failed to back the proposals later this summer.
The debt overhaul - achieved with financing from Goldman Sachs, Barclays and Australian bank Macquarie - will see debt levels reduced to around £2.9 billion.
It hinges on the creation of a new company to be listed in Paris and London and which would be the vehicle for the restructuring.
Eurotunnel said there would be no dilution of share-holders' interests for three years, until the conversion of £1.8 billion of debt from 2009.
That could dilute holdings by up to 87 per cent, but this figure could be reduced as the company may be able to buy back debt. At the same time shareholders, who will receive warrants to buy additional shares, will keep the chance to take part in any upside from the new company.
The plan, which has been ten months in the making, will be put before shareholders at the company's annual meeting on July 12.
"There's no alternative to this plan," said Eurotunnel's chairman Jacques Gounon.
"I'll tell the shareholders that the choice is obvious. Either they support the plan with a simple majority and it will be put in place. If not, I will file for bankruptcy the following day."
His comments came despite reports suggesting US bank Citigroup was interested in underwriting £3.5 billion of new investment and debt, while leaving shareholders in control of the group.
Eurotunnel has repeatedly warned that without a debt overhaul it would not be able to guarantee the future of the group beyond 2007 - the point at which it is due to start paying back a significant portion of the debt.
Last month, Eurotunnel secured a waiver period that would allow for all creditors to come together for the first time to reach a "consensual financial restructuring plan".
Creditors could call in the company's debt and take it into their own hands if Euro-tunnel is unable to reach agreement with them.
Shares are suspended in London and Paris.