Eircom employees risk losing their shareholding under restructuring deal
The head of Eircom’s employee share ownership trust (ESOT) — which owns a 35% stake in the company — has raised the issue via a note on the ESOT members’ website.
According to trust chairman Jerome Barrett: “As it stands, the ESOT is not a party to the senior lenders’ proposal. What can be expected is that some form of &merger and acquisition process may be undertaken; and what role — if any — the ESOT may have in a future ownership structure will only be determined as the process evolves.”
The Eircom debt issue gathered pace last month with the company — which had already breached debt arrangements with its lenders — receiving a further extension, to the end of January, of its covenant waiver by it senior lenders.
Eircom’s independent directors had, from early December, three debt restructuring proposals before them: Two from various lenders and one from the company’s majority shareholder, the Singapore-based ST Telemedia.
However, just before Christmas, ST Telemedia’s representatives resigned from the Eircom board after its proposal was rejected by lenders, leaving the company in the position of having to proceed with talks with representatives of its lenders.
ST Telemedia, which owns 65% of Eircom, had lodged its December debt restructuring proposal after initially withdrawing a plan, due to the uncertainty in the eurozone.
