Eircom plans transfer to Jersey entity

Eircom has announced plans to transfer the assets and liabilities of its main operating company to a new entity incorporated in Jersey.

The move — which would see the newly-incorporated enterprise remain tax resident in Ireland — would give the company further flexibility to pay dividends to shareholders, as the group continues to weigh up its options as part of a previously announced potential restructuring.

The group is considering options including a return to the stock market as part of a strategic review that is ongoing.

“As announced on 11 April 2014, Eircom has initiated a review to explore various strategic options for the Eircom group, including a possible listing on a public market,” a statement from the company read.

“That review continues. In this context, the transfer of the assets and liabilities of Eircom Limited (Eircom’s principal operating company) to a new operating company, which would be incorporated in Jersey and tax resident in Ireland, as envisaged by the proposed reorganisation, would provide eircom greater flexibility to pay dividends to shareholders in the future,” the statement added.

A spokesperson confirmed that a process of consultation with its shareholders, bondholders, and lenders regarding the potential reorganisation commenced as of yesterday.

Eircom said the reorganisation, if implemented, will not have any impact on its operations, nor will it impact upon its customers or business partners as its operations will remain in Ireland.

It is understood that the company has approached a number of large private-equity firms about a potential buyout.

The Dublin-based telecoms company — for whom a return to the stock market would constitute its third listing — has changed ownership six times since 1999.

The government initially floated the company in 1999 only for it to subsequently return to private ownership two years later, before being re-floated in 2004 for another two-year period.

It emerged from bankruptcy protection in 2012 after a 40% debt write-off worth €1.8bn.

A return to the stock market is seen as a step towards further reducing its net debt burden of €2.2bn.

Eircom has been cutting jobs and upgrading its broadband network in an effort to revive revenues and earnings.

Latest figures show that earnings before interest, tax, depreciation, and amortisation for the nine months through March fell 1% to €352m.