2007 Reference Document for Groupe Eurotunnel SA PDF file size

4. RISK FACTORSHowever, redemption of the NRS I and the SDES in GET SA Ordinary Shares will have a significant dilutive impact onGET SA shareholders, particularly due to the adjustment of the redemption ratio of the NRS I and the SDES (as aresult of the transactions aimed at raising funds in anticipation of the redemption in cash of the UnredeemedNRS II) if all of the NRS I and the SDES were to remain in issue until their respective maturity dates.For further detail on the dilutive effect of the redemption of the NRS I and SDES in GET SA Ordinary Shares, pleaserefer to section 21.1.6 of this Reference Document and notes 15 and 17 to the consolidated accounts at Annex IV ofthis Reference Document.Eurotunnel Group may not be able to redeem the Unredeemed NRS II in cash before they are redeemed inGET SA Ordinary SharesThe terms of the NRS II provide for EGP to be able to redeem all or part of the NRS II in cash prior to maturity, whichwould reduce the overall dilutive effect of the redemption of the NRS in GET SA Ordinary Shares for the GET SAshareholders. However, it is not certain that Eurotunnel Group will have the necessary financial capacity to redeemthe Unredeemed NRS II in cash prior to the date of their automatic redemption in GET SA Ordinary Shares.The Safeguard Plan provides for Eurotunnel Group to be able to raise additional financing to redeem the NRS II incash prior to maturity, principally by increasing its level of debt in certain circumstances or by using the proceeds ofone or several share capital increases reserved to the shareholders of GET SA. It is not certain that EurotunnelGroup will be able to raise the necessary additional financing on acceptable terms, that one or more share capitalincreases may be made on acceptable terms taking into consideration market conditions, or that the shareholdersof GET SA will agree to participate in the share capital increases to enable Eurotunnel Group to have, within therequired time period, the necessary financial capacity to enable EGP to exercise its right to redeem the UnredeemedNRS II in cash.The Warrants may not reduce the dilutive effect of redemption of the NRS in GET SA Ordinary SharesThe exercise of 55% of the Warrants which were issued as part of the Reorganisation to Unitholders tendering theirUnits to the Offer and of 45% which were issued to Noteholders may only occur during a period of six months fromthe date on which the number of GET SA Ordinary Shares for which the Warrants may be exercised is determined.This number, which is to be determined after 30 June 2011, will primarily depend on the financial results ofEurotunnel Group in 2008, 2009 and 2010 and on the occurrence prior to 30 June 2008 of exceptional events inEurotunnel Group, which remain uncertain despite the efforts of GET SA to achieve them.No assurance can be given as to the number of GET SA Ordinary Shares for which the Warrants may be exercised.Certain GET SA board decisions will only be able to be taken with the agreement of certain directors proposedfor appointment by ENHCIn accordance with the terms of the Safeguard Plan, as soon as ENHC has provided information confirming that theGET SA Preferred Share will not be converted into a GET SA Ordinary Share, and the directors proposed by ENHChave been appointed, a qualified majority of eight directors out of eleven will be required for the GET SA board ofdirectors to make certain important decisions. Consequently, these decisions will be subject de facto to theagreement of at least one of the members of the board of directors proposed for appointment by ENHC following thedirectors’ appointment, in accordance with the specific corporate governance rights granted to ENHC by virtue ofthe GET SA Preferred Share.An abusive use of the specific rights attached to the GET SA Preferred Share could prevent the effective functioningof the GET SA board of directors.Price volatility of GET SA Ordinary Shares, the Warrants, and the SDESSince the NRS I are redeemable in GET SA Ordinary Shares, redemption of all or part of the NRS I could have anegative impact on the price of GET SA Ordinary Shares, the Warrants, or the SDES. If the Eurotunnel Group is not ina position to redeem in cash the Unredeemed NRS II, the redemption of the Unredeemed NRS II in GET SA Ordinary7