Irish former monopoly Eircom limped towards a successful exit from examinership status last Friday, after the firm’s creditors backed a plan that will result in the group’s gross debt levels being cut to EUR2.35 billion (USD3 billion) from the current EUR4 billion. The scheme of arrangement was supported by all the telco’s first and second lien lenders, although those groups holding floating rate notes (FRNs), who are currently owed a total of EUR350 million, did not support the scheme. The FRNs stand to be wiped out under the proposed debt restructuring plan and it remains to be seen whether or not they will challenge the rescue plan. The examiner Michael McAteer is expected to return to the Commercial Court today to provide it with an update on the outcome of last Friday’s meeting.
As reported by TeleGeography’s CommsUpdate, last Thursday the Irish courts dismissed a legal challenge from Hong Kong-based ports-to-telecom operator Hutchison Whampoa to have its EUR2 billion offer for Eircom considered. Mr Justice Peter Kelly refused Hutch’s application to defer the creditors’ meetings and require the court-appointed examiner to withdraw his refusal to admit Li Ka-shing’s company to proceed to phase two of the process. In brief, Justice Kelly ruled that Hutch’s petition would effectively constitute a plea for the courts to intervene in a commercial judgment and interfere with the examinership process, something it is not permitted to do. He also adjudged that the examiner’s reasons for disbarring Hutchison Whampoa’s progression to phase two of the process had ‘reasonable basis’. In a statement, the Hong Kong conglomerate said it was ‘disappointed’ with the court’s ruling but respected its decision.