Struggling telecom Eircom says it has decided to support in principle a restructuring proposal by its most senior lenders.
That process could see the firm placed in administration.
The country’s largest fixed-line telephone company has been in talks with lenders for months about the restructuring of debts of €3.8bn. Its independent directors were mulling proposals from the syndicate of first-lien senior lenders, the most senior in any restructuring, owed €2.71bn, and another from a group of second- lien senior lenders owed around €350m.
The proposal from its senior lenders was seen as the most likely outcome given a weaker position from the second-lien lenders and the high chance that a recently announced bid to find an outside buyer would be a flop, which Eircom confirmed yesterday.
The former telephone monopoly said in a statement that it had received expressions of interest ahead of a Monday deadline but decided to reject them. The company will continue to finalise a revised offer with the senior lenders, it said. In September the company obtained a covenant waiver from lenders to avert a possible debt default.
Singapore Technologies Telemedia, a unit of Temasek, had acquired a 65% stake in Eircom in 2009. In December, STT withdrew from the company’s board after lenders rejected its debt restructuring plans.