200,000 face disruption as Chorus on the ropes
As the High Court appointed an examiner to Princes Holdings, the company which trades as Chorus, it also emerged that Tony O'Reilly's Independent News and Media (INM) had divested itself of its 50% stake in the loss-making company for what is believed to be a nominal sum.
Its share in the company was bought by the other shareholder, Liberty Media International, which now owns the entire company.
The company's €385 million debts took observers by surprise yesterday. With 550 staff and a turnover of 65m, Chorus is the main cable and MMDS operator in Cork, Limerick and Galway cities and most counties outside the capital.
While the company itself and the court-appointed examiner John McStay both expressed confidence about its long-term viability, opposition parties expressed concern over the implications for cable television services.
Fine Gael communications' spokesman Simon Coveney said Chorus and the examiner now needed to reassure its customers it will be in a position to continue providing a service.
"The end of Chorus would mean satellite TV and Sky will have an effective monopoly. It's important we have a strong cable service offering strong competition to Sky," he said.
Labour Party spokesman Tommy Broughan voiced concern for the employees and subscribers, saying it was vital the company survives in the long run.
According to Eamon Ryan of the Green Party: "There is a need for competition and for that reason it's very important to see Chorus succeed," he says.
A spokesman for INM said it had signalled as far back as 2000 it wished to divest its holding in Chorus. Last year, INM wrote down the value of the debt-laden company by 82m to nil value in its accounts.
The spokesman said that INM's move to dispose of its stake had been viewed positively by the markets and its share price "had held strong during the day".
Chorus yesterday said its owner, Liberty Media, would invest in the firm upon successful completion of the examinership. It said the company was in discussions with the company's bankers to settle the debt.
Chorus' chief executive Phil Freedman assured customers about the company's future. "There will be no disruption or alteration to the services our customers currently receive," he said.
The company's examiner John McStay added: "It is clear Chorus has a very fine business, with strong prospects ideally suited to the examinership process."
Legal sources said last night examinership would give the company a 70-day period when it would be protected from creditors, protection that could be extended by court order.
One specialist in the industry said Chorus has not been a stellar performer and its large historic debt had hampered its investment in growth areas like broadband and digital TV services.
