Eircom weighs up IPO move

Eircom has said that no decision has been taken regarding its future ownership, despite reports suggesting it is planning to raise €1bn via a stock market flotation in September.

A spokesperson for the company said yesterday that the strategic options review which began in April, with Goldman Sachs and Morgan Stanley acting as joint advisers, remains ongoing; but did concede that an IPO is “definitely” being considered.

However, the company is understood to be still open-minded regarding other options aimed at bolstering its financial strength, as well, including a trade sale or attracting additional investment.

The former State-controlled telecommunications company has already had seven different owners (including the State and the public) and has been publicly owned on two occasions.

Just over a month ago it said that the appointment of joint advisers (Goodbody Stockbrokers and Davy have been taken on as domestic advisers) shouldn’t be judged as a signal that a decision is imminent, or that the review was accelerating towards a conclusion.

However, reports over the weekend suggested plans for a third Eircom float are being finalised, with the company hoping to raise around €1bn from the dual Dublin and London share listing, with most of the proceeds going towards paying off its €2.3bn debt.

An IPO has, generally, been seen as the most likely scenario.

However, the timing of such an event could be the only real unanswered question, with speculation suggesting the move might not happen until next year.

Eircom’s attractiveness to investors has strengthened in recent months, with Moody’s upgrading its credit rating by one notch to a B3 reading (albeit still below investment grade) and the company successfully extending the maturity of around €2bn of its debt, by two years to 2019.