Eircom plans shares sale

EIRCOM is being asked by some of its bondholders for more time to consider a plan by the company to sell shares.

A group led by Erlend Lochen, a fund manager at Standard Life Investments in Edinburgh, held a conference call Thursday to discuss the plan by Eircom and its parent Valentia Telecommunications Ltd, said investors who took part in the discussion and asked not to be identified.

Lochen declined to comment. Investors have requested that the company extend a Wednesday deadline it set for approval of the plan.

“There are no plans at the moment to change the deadline,” said Peter Lynch, Eircom’s chief financial officer. “We’re not going to make bondholders feel threatened.” Valentia said last week it plans to distribute dividends if it goes ahead with a public share sale.

Standard & Poor’s said Wednesday the sale may prompt a downgrade of Eircom’s and Valentia’s $1.2 billion debt.

Eircom sold the $1.2bn of 10-year bonds in August to repay loans used to finance the company’s purchase.

The securities, sold through Eircom Funding, are rated BB+ at Standard & Poor’s, the highest so-called junk rating, and four levels lower at B1 by Moody’s Investors Service. Valentia’s credit is rated BBB- at S&P, the lowest investment grade.

Citigroup Inc and Goldman Sachs Group Inc are acting for the companies in seeking bondholder consent to the plan, according to the press release.