Ireland’s Eircom yesterday published an investor update announcing that the High Court has approved the scheme of arrangement recommended by the court-appointed examiner, Michael McAteer, to restructure Eircom Group. The court’s approval paves the way for the group’s three operating units – Eircom Limited, Meteor Mobile and Irish Telecommunications Investments Limited – to successfully exit examinership on 11 June 2012. The approval marks the second largest successful examinership in the history of the Republic.
From the exit date, Eircom Group’s capital structure will change and its senior lenders will become its new shareholders. At the same time the entire issued share capital will be transferred to a company owned by Eircom’s senior lenders, and ST Telemedia and the Employee Share Ownership Trust (ESOT) will cease be the group’s shareholders. Furthermore, the agreement will see Eircom’s debt reduced through the reduction or writing off of ‘certain classifications of debt’ as agreed at the recent creditors’ meetings held on 18 May 2012. The Irish group balance sheet debts will be reduced by more than 40% to EUR2.3 billion (USD2.94 billion), down from EUR4.1 billion. Finally, Eircom says that unsecured trade creditors will be ‘unaffected by the scheme of arrangement and will continue to be paid in full for work completed in accordance with the terms of their contracts’.
Commenting on developments, Paul Donovan CEO Eircom Group, said: ‘Today is an important day in the history of Eircom. The group entered the examinership process with the objectives of significantly reducing debt levels and placing the company’s balance sheet on a stable financial footing for the medium to long term. These objectives have now been achieved … Today’s developments underline the commitment from Eircom as the state’s largest telecommunications company, to ensure we are fully aligned with the national objective for strategic infrastructure. A stronger eircom is good for Ireland. The group will continue with its operational transformation into a more vibrant and competitive business continuing to invest in new products and services while reducing costs