Goldman Sachs left with 20% of Eurotunnel

Goldman Sachs is about to become the largest shareholder in troubled Eurotunnel with a 20% stake in the Channel Tunnel operator.

The US investment bank has been left holding most of an €800 million (£613 million) deferred share placing it underwrote through its infrastructure fund. It is thought it has ended up with about €650 million of the €744 million taken up by institutional investors. The rest was bought by existing shareholders.

The placing was part of a major refinancing package by Eurotunnel chairman and chief executive Jacques Gounon after the firm was rescued from collapse last year.

The deferred stock, which will be listed in Luxembourg, is convertible after 18 months into new Eurotunnel shares. If Goldman is left with a holding of 20%, it would have a major say in Eurotunnel's future.

A source said: "I don't think it was a case of Goldman failing to shift it. They know what these markets are like and were prepared to take the lion's share."

Mark McVicar at Dresdner Kleinwort said: "Goldman would have worked on the basis that they were going to get most of it. The business is trading well and it's a solid investment for an infrastructure fund."