Eircom backers abandon investment plan amid eurozone jitters, papers say

5 Dec 2011

A number of Irish news sites are reporting that two of the main shareholders in troubled national carrier Eircom, Singapore Technologies Telemedia (STT) and the company’s employee shareholder trust (ESOT), have abandoned plans to invest in the company and retain overall control of it, citing instability in the eurozone as the reason. RTE News writes that the unexpected twist could leave the way clear for a consortium of lenders – comprising banks and private equity groups – to make a move for the Republic’s largest telco. Last Friday, Eircom received two proposals from its lenders on how to restructure its EUR3.75 billion (USD5.20 billion) of debt, but neither apparently emanated from STT or ESOT. Eircom’s shareholders’ decision is understood to be due to ‘macro-economic concerns over the wider Eurozone.’ Both have said they will continue to monitor the situation, but in the meantime Eircom may have two proposals on the table from groups looking to secure control of the telecoms operator. Unconfirmed reports say the rival bids are from a group of first lien senior lenders, and from a group of second lien senior lenders. Details of the plans, which will now be considered and submitted to the board, remain confidential, Eircom said. The telco’s CEO Paul Donovan is quoted as saying: ‘While the current shareholders have not yet submitted a proposal, the independent directors and management will continue to encourage both shareholders to do so … However, the immediate priority is to ensure that practical progress with regard to the balance sheet remediation process takes place’.

Ireland, eir