Examiner confirmed for Eircom

The High Court has confirmed the appointment of an examiner to Eircom.

The decision will facilitate efforts to achieve a restructuring of Eircom and related companies employing a total of 5,800 people.

Mr Justice Peter Kelly last month appointed an interim examiner to Eircom and two related companies — Meteor and ITI — to ensure protection from creditors while putting in place a restructuring plan.

The matter came before the judge yesterday when he heard there was no opposition to the application to confirm examinership.

Paul Gallagher SC, for Eircom, said there were no relevant changes in the companies’ position since the interim examiner was appointed and the companies met the criteria for appointment of an examiner. Both the interim examiner and an independent accountant felt the companies had a reasonable prospect of survival as a going concern, the court heard.

The judge was told DW Investment Management Ltd was making no formal objection to examinership but was reserving its position amid concerns about reports unsecured floating rate mote holders — owed €350m — would receive nothing under the plans.

Vodafone Ireland, which was described as the largest wholesale customer of Eircom services and also a supplier of significant services to it, indicated it had some concerns about aspects of the proposals in the independent accountant’s report and would be seeking, if those proposals became a “blueprint” for restructuring, to raise its concerns with the examiner.

Michael Collins SC, for first lien lenders owed €2.7bn, said most had indicated support for the restructuring and supported the examiner’s appointment. Second lien lenders, owed €350m, also supported examinership.

The Revenue Commissioners, which the court heard are owed €6m, adopted a neutral position.

The court heard Morgan Stanley was engaged to deal with parties who expressed an interest in acquiring the companies as a whole. No formal expressions of interest had been received but the interim examiner had set out a process for interested parties, under which non-binding offers must be made by April 23 and binding ones by May 7.

The judge said he was satisfied to confirm Michael McAteer of Grant Thornton as examiner. The companies met the criteria for examinership, including insolvency, as they were insolvent “in spades”, he said. The report of the interim examiner also fortified him in his view the companies had a reasonable prospect of survival as a going concern.

The case will come before the court again on May 18.