[Sponge Bob]

Originally Posted by Sponge Bob

Sadly the latest restructuring proposals will leave eircom with an unfeasible €2.1-2.2bn of carried debt thereby ensuring a further default in around 3 years time.

Three ( their parent actually, Hutchison Whampoa) have made a most generous €2bn cash offer for eircom and that is the best offer they will get between now and what inevitably will become Default #2 in around 3 or 4 years time. .

http://www.irishtimes.com/newspaper/...315905230.html

Some wonder why Hutchison/3 left it so late to table an offer for Eircom. Morgan Stanley ran a sale process just before the examinership was put in train.


This might have something to do with the price (that was) being sought – thought to be €3 billion-plus. Hutchison/3 seems to value Eircom at €2 billion, end of story.


Goldman Sachs has advised the Hong Kong-based company on the bid. It has form with Eircom, having advised Sir Anthony O’Reilly’s Valentia on its takeover of Eircom and helped it to IPO.


Unless Goldman Sachs can pull a rabbit out of a hat in the next couple of days, the bid looks doomed. It will become a mere footnote in the weird and wonderful story of Eircom post privatisation.

We shall see. If Hutchisons bid is rejected then the whole sorry mess will continue.

[Sponge Bob]

Hot off the press. The €2bn bid was rejected and the scheme to leave eircom carrying €2.3bn of debt is going to a vote next friday.

approval. Roll (slowly) on the next default.

.....unless maybe Hutchison bid €2.1-2.2bn in the meantime. We'll know by monday.

http://www.irishtimes.com/newspaper/...reaking20.html

Mr McAteer last night last night rejected a revised cash offer for Eircom from 3 Ireland and its Hong Kong-parent group Hutchison Whampoa.

[Solair]

That doesn't sound great to be honest. I can't see many other bidders being that interested in eircom, particularly given the state of the Irish economy and its dependence on the Irish consumer market.

[gbee]

Originally Posted by Solair

That doesn't sound great to be honest. .

I'd take the view that the 3 Mobile network has set a reputation for 3 Telco and TBH, I'd prefer to see Eircom getting another bailout of tax payers money.

Now, if Sir Richard Branson expressed an interest, I'd grab it with open arms and think him a saviour.

[Sponge Bob]

Nobody else will offer €2bn for it . Morgan Stanley hawked it around at €3bn and were laughed at.

Someone else ( O Brien ???) offered €1.7bn for it and I reckon €1.5bn is fair value...unless the social welfare benefits are cut entirely which alone could cost eircom 100k customers overnight.

UPC added 25,000 Telephone Customers in the last quarter alone which is even more impressive when you realise that this Telephone service is only available to 700k homes in large towns and cities.

That is analagous to eircom picking up 75k new telephone connections in a QUARTER considering their much wider reach to the 2m homes and 100k businesses in the state...3x that of UPC at present.

The punters are jumping because of the outrageous line rental charges and no next generation nuthin will get most of them back to eircom.

[AlmightyCushion]

Originally Posted by Sponge Bob

Hot off the press. The €2bn bid was rejected and the scheme to leave eircom carrying €2.3bn of debt is going to a vote next friday.

approval. Roll (slowly) on the next default.

.....unless maybe Hutchison bid €2.1-2.2bn in the meantime. We'll know by monday.

http://www.irishtimes.com/newspaper/...reaking20.html

I remember reading somewhere else that Hutchinson Whampoa were going to invest 1.3B in the eircom network. If true that would be brilliant. I am wary of them taking over eircom (3's customer service is woeful at best) but they have the money and seem willing to invest. We really need eircom to start competing and sticking it to UPC.

[Solair]

Originally Posted by gbee

I'd take the view that the 3 Mobile network has set a reputation for 3 Telco and TBH, I'd prefer to see Eircom getting another bailout of tax payers money.

Now, if Sir Richard Branson expressed an interest, I'd grab it with open arms and think him a saviour.

On what basis would the state bale eircom out?

It's a private company, owned largely by the Government of Singapore via a chain of investment funds.

Previous owners failed to invest in its telecommunications business and left it with vast amounts of debt.

So, it's now saddled with a massive debt and hasn't invested in infrastructure so it is being absolutely wiped out by UPC who are using vastly superior broadband technology.

Eircom is not a state owned company, and it is likely that the EU would see any bale out as illegal state aid to a private corporation.

The state itself is also insolvent, so where exactly would it get the money to go around baling out badly run telecoms companies?

You can be sure that any attempt to do that would result in eircom's competitors taking legal action against the state to prevent it.

Eircom will be purchased at a huge discount, if not by 3, by someone else.

[Sleepy]

Originally Posted by gbee

Now, if Sir Richard Branson expressed an interest, I'd grab it with open arms and think him a saviour.

Branson wouldn't touch it with a barge pole. After Virgin's experience with previously state-owned unions at SN Brussels Airlines taught him that it's cheaper to pay the costs involved in a start-up than to deal with them.

[uncle_sam_ie]

Sponge Bob,
What will this mean for the infrastructure in years to come? What will it mean to those living outside the cities that can only get eircom's DSL?

[Solair]

Originally Posted by Sleepy

Branson wouldn't touch it with a barge pole. After Virgin's experience with previously state-owned unions at SN Brussels Airlines taught him that it's cheaper to pay the costs involved in a start-up than to deal with them.

Eircom isn't state-owned and hasn't been for 13 years. It's union issues are largely over and done with, other than the legacy of pension funding.

It's staffing levels are probably quite small for the kind of company it is and its mobile arm was never publicly owned.

Meteor was a slim, cut-throat private operator and late entrant to the Irish market that aggressively grabbed market share. It still is very much in that mode.

Eircom's problem isn't marketing / branding or sales. It's problem is that it was asset-stripped by investment funds who left it with a huge legacy of debt (all of which was used to purchase itself!)

The day-to-day operations of eircom were hobbled by the fact that it never had the ability to invest in its own networks which has left it about 5 to 10 years behind UPC, its main competitor.

The best thing that could possibly happen to this disaster of a situation now is that eircom's examinership finds it a new owner that can run it as a phone / broadband company and not as a speculators' plaything.

[Kristopherus]

The Examiner has now agreed to apply to the High Court to take Eircom out of examinership. This is being done in agreement with the (Senior) lenders. What does all that mean? Is there a white knight???

[PseudoFamous]

Originally Posted by gbee

I'd take the view that the 3 Mobile network has set a reputation for 3 Telco and TBH, I'd prefer to see Eircom getting another bailout of tax payers money.

What's wrong with 3, exactly? They're as good a bidder as any, and if they're willing to invest and bring a modern net infrastructure around, I surely won't complain.

[A Primal Nut]

Most of the Eircom debt was put on them by their previous owners, who transferred the debt from other companies to Eircom. Eircom itself has always been a profitable company.

[Sponge Bob]

Originally Posted by uncle_sam_ie

Sponge Bob,
What will this mean for the infrastructure in years to come? What will it mean to those living outside the cities that can only get eircom's DSL?

The problem is that they will carry TOO much debt AFTER the restructuring and exit from examinership. They needed to write it own to around €1.5bn from €3.8bn or so. They only wrote it own to €2.3bn.

Therefore there will be no investment in rural areas only in cities where UPC is killing them. They will upgrade exchanges with banjaxed ATM gear to NGB as required because the ATM spares are starting to get scarce and costly now. There are a good dozen rural exchanges out there that were promised basic ADSL1 broadband in April 2007 and still haven't been upgraded 5 years later. Another 250 (mainly rural) exchanges were promised (and got) nothing at all beyond dialup.

In the last quarter alone fully 4% of all the homes in Ireland that COULD take UPC Telephone services signed up to that very UPC Telephone service. 25,000 out of around 700,000.

Were that growth in UPC telephony customers to be sustained in future then every urban residential customer of eircoms would have abandoned them by the end of 2018.

Entirely their own fault, they were a cash cow for a clique withn the union and the likes of George Soros for years.

When eircom was floated the company was valued at around +€7bn of which the exchequer got €5bn.

Before the debt writeoff it was worth -€3.8 bn and less the €2bn Hutchison were prepared to pay reducing its negative net value to -€1.8 bn

This is a net turnaround of -€8.8bn in value since 1999. Genius or what!

[Lemming]

Originally Posted by gbee

Now, if Sir Richard Branson expressed an interest, I'd grab it with open arms and think him a saviour.

I wouldn't be so quick to cheer-lead Virgin taking ownership. Here in the UK, if you're on Virgin cable you're sorted, but if you're a DSL customer i.e. reliant on interacting with third party engineers, you are a second class citizen. I've had more than a few frustrating moments/days/weeks with their DSL service (having experienced their cable service).