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Eircom to offer 20% stake and EUR300m to biggest lenders

7 Oct 2011

Irish former monopoly Eircom has floated a plan to offer its principal lenders a 20% stake plus EUR300 million (USD 400.8 million) in cash payments, in a move that would allow shareholders to retain control of the company. The Irish Independent reports that Eircom’s main lenders are collectively owed EUR2.36 billion and are considering the offer as part one of what looks to be a long-running process to resolve the telco’s financial problems. Under the plan though, other lenders stand to lose the EUR1.3 billion they are collectively owed, it added.

As a further initiative, Eircom is set to pay out EUR300 million to repay approximately 11% of its top-ranked loans early, leaving 80% of the EUR2.36 billion sum to be restated as new debt. It has taken more than twelve months for a substantive restructuring plan designed to tackle Eircom’s unsustainable EUR3.70 billion of debt to make it off the drawing board. It is understood the proposal is being backed by Singapore Technologies Telemedia (STT), which owns two-thirds of the operator, and the employee shareholder trust ESOT, which owns the rest. If carried out, the current shareholders will retain a majority stake and control of Eircom.

Ireland, eir

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