STT withdraws Eircom debt proposal, board members resign

Eircom's largest shareholder, Singapore-based telecoms company ST Telemedia (STT), has withdrawn its proposal to restructure the firm's €3.75bn debt, it was announced today.

The move follows the rejection yesterday of the proposed restructuring plan by Eircom senior lenders.

All of STT’s representatives have resigned effective yesterday from the boards and committees of eircom Limited and its group companies.

STT had earlier this month submitted the proposal to Eircom independent directors and senior lenders to restructure the operator’s debt pile in a bid to keep hold of the company.

The proposal was one of three under consideration by Eircom's independent directors.

Eircom has now said it will proceed with detailed discussions regarding a restructuring proposal from a syndicate of first-lien senior lenders owed €2.4bn.

STT’s offer submitted on December 12 would have required senior lenders to accept a 25% impairment of their debt, up from 8% in the earlier proposal.

A statement from STT said it was disappointed that Eircom "had not engaged" with its latest proposoal, and said the latest action was taken "in the best interest of the Group".

"After many months of deliberations, today’s announcement regarding a majority of the First Lien lenders choosing to implement the proposal by the FLCC (First Lien Co-ordinating Committee ) provides an environment of certainty for all the parties to move forward with the restructuring process," said Eircom chairman Ned Sullivan.

"I would like to acknowledge the very valuable contribution of STT and the STT directors to the development of the Group over the past two years.”