Quinn takes the Smart option
Smart, which caused a major upset last month by beating eircom and its subsidiary Meteor in the race for the country’s final 3G mobile licence, said it would use the money to make the initial payments necessary to secure the licence.
Quinn Funding, an associate company of the Quinn Group, Mr Quinn’s business empire that spans the cement, glass, insurance and leisure sectors, will provide a loan of €28.35 million to Smart. The loan can be converted into Smart shares, which are quoted on London’s Alternative Investment Market at the end of its two-year term. Quinn Funding will be able to take over Smart’s mobile business and its assets if Smart fails to meet its loan obligations. Smart also said yesterday that it had agreed a 6-month bank loan, also for €28.35 million, that will be personally underwritten by Mr Murtagh, who holds a stake of around 15% in the company. The agreement means that Smart’s lenders can pursue Mr Murtagh if it fails to repay the loan and the bank is unable to reclaim its money through the sale of Smart Mobile assets. Smart will pay Mr Murtagh 285,000 for his role in putting the bank finance in place.
Smart chief executive Oisin Fanning said: We are delighted to have secured the backing of the Quinn Group for the development of Smart’s 3G mobile operations. The Quinn Group has achieved outstanding success in building substantial businesses in Ireland. This financing marks a significant step in our 3G mobile plans and complements Smart’s strategy in providing high speed broadband to the Irish market.”
The company said the latest financing deal “greatly strengthened” its negotiating position and that discussions were already underway with potential partners that will help it build its proposed 3G network. The new mobile network will be the country’s fifth and will join those operated by Vodafone, O2, new operator 3, which is owned by Hutchison Telecom, and Meteor. But Meteor’s licence does not allow it to provide 3G services.
The company also said yesterday that it was satisfied with its rollout of fixed-line broadband and that it was busy hiring and training extra staff to drive sales in the residential internet and fixed-line phone market.
