Eircom to take on financial advisers in bid to decide on long-term strategy

EIRCOM is set to take on one or more corporate financial advisers over the next month or so to aid it in reaching a decision on its long-term financial strategy.

However, while a report in the Financial Times suggested that the services of London-based financial advisers Gleacher Shacklock were being lined up, it is understood that a number of investment banks are in the frame and no appointment has yet been made.

Last month, Eircom warned that it will be making further cost reductions as it struggles to cope with rising economic and competitive pressures, adding that it will also be looking to accelerate its previously stated target of redundancies by March of next year.

That announcement came in tandem with the company’s third-quarter financial results, which detailed year-on-year declines in both profits and revenue.

The company has currently cut 894 of the 1,200 jobs it wants to shed by next March and wants to accelerate that process. It has remained tight-lipped over the possibility of further job cuts forming the guts of ongoing cost reduction drives.

While Eircom has not reached any decision on its long-term financing plans, it is looking at a possible bond issue or exchange and a potential equity injection from shareholders. The company recently underwent its fifth change of ownership in little over a decade when the Singapore-based ST Telemedia took a controlling stake.

While Eircom management was refusing to talk yesterday, a source close to the company suggested that no decision on anything – be it the appointment of a financial adviser or a financing plan – had been taken as yet.