2007 Reference Document for Groupe Eurotunnel SA PDF file size

4. RISK FACTORSguaranteed that the value of the New Ordinary Shares received by the SDES holder in connection with theredemption of the SDES will be equal to or greater than the value as it stands at the date of issue of the SDES.Similarly, the value of the New Ordinary Shares received, as applicable, by the SDES holder in respect of thepayment of the TSRA return in New Ordinary Shares cannot be guaranteed.If the Eurotunnel Group decides to pay the return on the SDES in cash, the amount of the return received bythe SDES holder may be lower than the amount which the SDES holder might have received inNew Ordinary SharesThe SDES Return will be comprised of (i) the issue and allotment to the SDES holder of 3 New Ordinary Shares perSDES, or (ii) at the option of GET SA, the payment in cash of interest calculated at an annual rate of 2% (within thelimit of the amount of available cash flow within GET SA, and provided that in the event that this cash flow isinsufficient, the SDES Return will be paid in whole or part in the manner described in (i)).Accordingly, if the Eurotunnel Group chooses to pay the return on the SDES in cash, the return received by theSDES holder in cash may be less than the market value of the New Ordinary Shares which the SDES holder mighthave received.If market conditions are unfavourable, the free allocation of the BSA to the GET SA shareholders may notbe carried outThe redemption of the Unredeemed NRS II is intended to be financed by the proceeds of a share capital increaseupon the exercise of the BSA, which should take place as soon as possible after the issue of the SDES dependingon market conditions.However, if the conditions surrounding the issue, particularly the market conditions, are unfavourable, it is possiblethat the proposed free allocation of the BSA to the GET SA shareholders may not be carried out.4.2 Market risksRisks relating to Eurotunnel Group’s indebtednessConsidering the level of Eurotunnel Group’s indebtedness and despite its significant reduction compared to theHistorical Debt:a very large portion of Eurotunnel Group’s operating cash flow will be used to make interest payments, whichcould limit its ability to finance working capital, capital expenditures, cost reduction programmes and anyacquisitions;Eurotunnel Group’s ability to plan for the future or respond to changes affecting its business and markets willbe limited;Eurotunnel Group could be in a less advantageous position compared to competitors that are less indebtedand those that have taken out fixed-rate loans at lower interest rates than those granted to Eurotunnel Group aspart of the Reorganisation; andEurotunnel Group will have limited scope to raise additional indebtedness in the future, due to its commitmentsunder the Term Loan, described in section 22.4.1 of this Reference Document.Finally, Eurotunnel Group must comply with its obligations and restrictions under the Term Loan, described atsection 22.4.1 of this Reference Document.See also the risk factor ‘‘Notwithstanding the implementation of the Reorganisation, Eurotunnel Group still has asignificant level of debt in a total principal amount of 4.164 billion euros’’ in section 4.1 above and note 19.2 iii to theconsolidated accounts at Annex IV of this Reference Document.9