The future of Eircom is set to be finalised next week, with creditors owed €3.75bn set to vote on debt restructuring proposals which are set to hand control of the company to its senior lenders rather than a trade buyer.
The examiner appointed to the telecommunications company, last month, Michael McAteer of Grant Thornton, said yesterday he has recommended an arrangement based upon proposals put forward by senior lenders. He said no other proposal will be considered, as he has signed the implementation agreement.
“This is an important step in the process which will hopefully allow Eircom, Meteor and Irish Telecommunications Investments to successfully exit the examinership process in the coming weeks,” said Mr McAteer.
It has been widely speculated in recent weeks that Eircom’s debt holders will ultimately take ownership of the company — which has already had six different owners over the past 12 years, and has been working on a restructuring of its €3.75bn debt for a number of months.
Mr McAteer did not go into the detail of the proposals in his statement, apart from saying they will be put to the company’s creditors for consideration at a meeting next Friday.
It is understood, however, that around €2.7bn is owed to Eircom’s senior lenders and it is thought two-thirds of those lenders are likely to take haircuts on their loans of between 10% and 15%, with debt maturity extended by three to four years. The new proposals should cut Eircom’s overall debt by between 40% and 50%.
Yesterday’s statement also puts paid to any chance of Eircom being taken over by Hutchison Whampoa, the parent company of rival communications provider 3 Ireland, which reportedly tabled a revised €2bn bid for Eircom earlier this week.
Eircom issued a brief statement yesterday, saying that it had been notified by the examiner that he had completed his assessment of proposals and declined the indicative second offer for the group.
The group’s 2011 financial results, issued last month, showed an 8% fall in annual revenue and a €2.5bn provision for restructuring debts.
© Irish Examiner Ltd. All rights reserved