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ComReg publishes decision on Eircom's separated accounts

24 Jun 2013

Ireland’s telecoms regulator the Commission for Communications Regulation (ComReg) has published its decision on former monopoly operator Eircom’s obligations to publish separated accounts. The watchdog’s release ComReg 13/59, dated 20 June 2013, states:

1. Under ComReg Decision D08/10 on accounting separation and cost accounting obligations, Eircom is required to prepare, audit and publish separated accounts, on an annual basis, on the basis of Historical Cost Accounts (HCA) and/or Current Cost Accounts (CCA), as required by ComReg.

2. ComReg has required Eircom to prepare separated accounts on a HCA basis only under Decision D08/10. ComReg confirms that for the year ended 30 June 2013, Eircom is required to prepare separated accounts on a HCA basis and that ComReg does not require Eircom to prepare CCA separated accounts. This will enable Eircom to allocate resources to other key areas in its regulatory audit process. ComReg considers that CCA accounts are currently not necessary to any of ComReg’s current pricing reviews.

3. ComReg confirms that, pursuant to Decision D08/10, Eircom is required to produce, audit and publish separated accounts annually, on a HCA basis only, unless and until notified otherwise by ComReg.

4. Eircom has confirmed to ComReg that, in the event it did not require CCA separated accounts to be prepared, CCA information will, nevertheless, be available for ComReg if required.

5. Eircom will continue to submit information in relation to the current cost of specific equipment classes, as and when required by ComReg, to assist in the construction of current and future pricing models. ComReg may have this information assessed by a qualified independent body.

TeleGeography’s GlobalComms Database notes that in June 2012 Eircom announced that the three group companies placed under examinership status on 29 March 2012 – Eircom Limited, Meteor Mobile Communications Limited and Irish Telecommunications Investments Limited – had successfully emerged from bankruptcy with a new shareholder structure and with 40% of its debts wiped out. In a press statement at the time, Eircom confirmed that a new simplified capital structure had been put in place and a new holding company – Eircom Holdings (Ireland) Limited – created. The equity in the new firm is owned entirely by the telco’s 200-strong group of lenders, led by US investment giant Blackstone, and former shareholders Singapore Technologies Telemedia (ST Telemedia) and the Employee Share Ownership Trust (ESOT) lost their stakes in the company.

The statement went on to say that Eircom’s examinership ‘provides the basis for a more sustainable capital structure’, with EUR1.7 billion (USD2.14 billion) of debt removed from the balance sheet, which will allow the group ‘to progress with the execution of the five year business plan supported by the board and its lenders’.

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