Eircom rescue plan could emerge within days, paper says

9 May 2012

The Irish Independent reports that a plan to rescue the country’s beleaguered fixed and mobile operator Eircom by handing it over to its principal lenders could be agreed within days. Citing sources close to the matter, the paper claims that an ‘investment agreement’ between Eircom’s examiner Michael McAteer, the carrier and its secured lenders is ‘timetabled to be agreed and announced today’. If the rumour proves to be true, it could put an end to Hong Kong-based Hutchison Whampoa’s bid to buy the company.

On 29 March this year Eircom filed for examinership status, giving it 100 days of court protection in which to formulate a solid rescue plan. Prior to it filing for court protection, the telco’s primary lenders, shareholders and management had all indicated their preference for a rescue scheme. Under the plan, control of Eircom would pass to its secured lenders, who are currently owed EUR2.6 billion (USD3.39 billion), who in turn would write off a portion of what they are owed in exchange for taking over the company. In addition, the main lenders insist that around EUR1.8 billion of debt – mainly owed to separate classes of lenders – must be written off as part of the deal, with the court’s approval. The court-appointed examiner has the power to agree a binding deal with creditors to back the plan.

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