Eurotunnel may seek bankruptcy protection from a French court through a procedure de sauvegarde which would stall creditors should the company's debt restructuring negotiations reach a stalemate. The waiver permitting negotiations to continue was slated to expire at midnight Wednesday, and under French law, a failure to reach an agreement before the deadline could have led to KPMG, which is the company's auditor, to declare the firm insolvent.

"The safeguard procedure therefore has two purposes: it will act as the threat to encourage creditors to compromise, and it will give the company protection should talks fail," explained Michael Cox at the Royal Bank of Scotland. "It is quite possible that an agreement could be reached today, in which case Eurotunnel will likely withdraw its request. If not, it is also possible that the court could appoint an official to mediate in the talks, and an agreement could still be reached. The eventual outcome is difficult to call."

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