Eircom
28 October 2011
Eircom offered help with debt mountain
Eircom, which is in talks with lenders to restructure its E3.75 billion debt, today said it had received an approach from a third party to help restructure its finances.The company, majority-owned by Temasek unit Singapore Technologies Telemedia (STT), did not say who the approach was from.The Sunday Times has reported that Hutchison Whampoa , an Asian conglomerate, had made contact with a co-ordinating committee of eircom's senior debtors in a bid to secure control of the operator. Hutchison Whampoa and eircom both declined to comment on the report. STT has proposed giving first-lien lenders, the most senior in any restructuring, a 20 percent stake in return for a haircut on their 2.4 billion euros of debt, a source close to the negotiations said. Second-lien lenders have also proposed swapping some of their 350 million euros debt for equity in the business, the source said.Talks started after eircom officially recognised a co-ordinating committee representing senior lenders in July. The lenders in September agreed to waive their debt covenants until Dec. 15, averting a possible default. In a trading update today, eircom said its earnings before interest, taxes, depreciation and amortisation for the quarter to Sept. 30 would show a "significant reduction" from a year earlier, but were in line with internal forecasts. It said it was losing market share in broadband delivered by telephone lines to cable and mobile broadband. The company registered a very significant reduction in EBITDA from a year earlier in its mobile operation due to increased costs linked to the roll out of high-end smartphones.It said revenue losses were partially offset by progress on cost reductions.
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