High Court to rule on Eircom survival plan

The High Court will hold a hearing today to determine whether to approve a survival plan for Eircom.

The hearing represents the final stage in the process aimed at securing a successful exit to the Eircom examinership — the largest in the history of the State — for companies employing more than 5,800 people.

The examinership covers Eircom Ltd, Meteor Mobile Communications and Irish Telecommunications Investments Ltd.

Mr Justice Peter Kelly will be asked to approve a scheme of arrangement advocated by Michael McAteer, the examiner to three Eircom companies, and approved at meetings of creditors last Friday. The judge was told yesterday that meetings of the companies’ first lien, second lien and swap creditors were held and all supported the scheme.

Paul Sreenan SC, for the examiner, said issues related to the other creditors could be adjourned while the confirmation hearing proceeded.

The proposed survival scheme involves a five-year business plan and restructuring aimed at reducing the companies’ gross debts to €2.35bn from €4bn.

The secured creditors will fare best under the scheme while the floating rate noteholders, owed €350m, will get nothing.

Last week, Mr Justice Kelly rejected an application by mobile phone operator 3 Ireland and its Hong Kong parent group, Hutchison Whampoa, supported by some of the floating rate noteholders, aimed at requiring the examiner to reconsider his decision to reject a €2bn cash offer by 3 and Hutchison.

The first lien lenders who supported the scheme on Friday represented 70% of the value of their €2.7bn loans and 66% in terms of the number of lenders. The second lien represented 72% of the value of the €350m in loans and 56% by number.

Mr Sreenan yesterday handed into the Commercial Court an update from the examiner on the outcome of the creditors’ meetings. The judge indicated he will hold the confirmation hearing today when the floating rate noteholders or others will have an opportunity to oppose the scheme.

Under the consensual arrangement with lenders, Eircom’s debt holders have agreed to a five-year rescheduling of the company’s borrowings.


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