EUROTUNNEL is on the brink of securing a formal agreement from creditors to begin talks on restructuring its £6.2 billion debt pile.

The Channel Tunnel operator, which is expected to announce dismal full-year revenue figures in a trading update on Tuesday, is very close to getting its creditor banks to waive a clause in its borrowings that precludes debt restructuring talks.

The process, which has so far taken more than three months, is extremely delicate. Under Eurotunnel’s current debt agreements, merely initiating restructuring negotiations can de deemed as an act of default. In order to begin talks, the company therefore has to secure a commitment that creditors will not attempt to foreclose on the business.

A Eurotunnel spokesman told The Times that discussions regarding the waiver were likely to be completed very soon. Negotiations, involving 122 banks, are likely to include the possibility of a debt-for-equity swap to relieve Eurotunnel of some of its huge interest burden.

Full-year traffic and revenue figures for 2004 will be revealed on Tuesday, with analysts suggesting that the performance of the group is likely to have deteriorated even further.

In October third-quarter traffic and revenue figures showed that the number of trucks using Eurotunnel’s shuttle service had dropped 4 per cent from the previous year. There were also steep declines in cars and coaches using the shuttle, despite fresh marketing initiatives and discounts introduced by the new management team.

Hauliers and freight firms are unhappy at being forced to guarantee at the start of the year how much traffic they will put through the tunnel if they want to qualify for cheap rates.

Eurotunnel faces its first financial test at the end of this year when it has to start servicing its debts from its cash flow, rather than by issuing “stabilisation notes” — zero coupon bonds convertible into shares.

The real financial crunch will come at the end of 2006, when the minimum usage charge that guarantees a minimum level of revenue from Eurostar to the Channel Tunnel group, will come to an end. Eurotunnel could lose about £40 million of revenue then, which also marks the start of repayments of the group’s junior debt.