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22-05-2012, 18:15   #1
bealtine
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Eircom to exit examinership on 11 June

http://www.siliconrepublic.com/busin...t-examinership

The High Court has approved a scheme recommended by Eircom’s examiner Michael McAteer that will allow it to exit examinership on 11 June. Under the scheme of arrangement Eircom’s debt is to be reduced by 40pc.

Under the scheme from 11 June Eircom's senior lenders will become shareholders.

The entire issued share capital will transfer to a company owned by the senior lenders.

ST Telemedia and the Employee Share Ownership Trust (ESOT) will cease to be shareholders.

The debts on Eircom Group's balance sheet will be reduced by 40pc to €2.3bn from €4.bn.

It is also understood that the new scheme of ownership will safeguard the jobs of over 5,000 employees.

In terms of the debts being written off, first lien lenders will see the money they are owed reduced by 15pc, second lien lenders' debt reduced by 90pc. Each secured creditor will receive a shareholding equal to their share of the remaining €2.3bn of debt.

Unsecured creditors will be paid in full and an additional lending facility of €150m.

"Today is an important day in the history of Eircom," CEO Paul Donovan said.

"The Group entered the examinership process with the objectives of significantly reducing debt levels and placing the company's balance sheet on a stable financial footing for the medium to long term. These objectives have now been achieved.

"I would particularly like to thank all of our customers, partners and suppliers for their patience and loyalty throughout this period of transition. Today's developments underline the commitment from eircom as the state's largest telecommunications company, to ensure we are fully aligned with the national objective for strategic infrastructure.

"A stronger Eircom is good for Ireland. The Group will continue with its operational transformation into a more vibrant and competitive business continuing to invest in new products and services while reducing costs."
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22-05-2012, 19:47   #2
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Under the scheme of arrangement Eircom’s debt is to be reduced by 40pc.

[..]

The debts on Eircom Group's balance sheet will be reduced by 40pc to €2.3bn from €4.bn.
Maybe it's just me but I don't think the debt reduction goes far enough, unless they suddenly find a new source of lending...
I would have thought the debt should be wiped out and the government should put in place something about strategic infrastructure to stop more asset strippers wrecking what's left of the company.

Thanks Tony O Reilly for destroying Ireland's infrastructure
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22-05-2012, 21:18   #3
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Each secured creditor will receive a shareholding equal to their share of the remaining €2.3bn of debt.
Does that not imply that infact there is no Debt interest payments now from Revenue and open the way for a DSL + Line Rental at €19 approx and investment in Network?
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22-05-2012, 21:23   #4
clohamon
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Thanks Tony O Reilly for destroying Ireland's infrastructure
Yes, inexplicable though. I don't think he made that much money out of it.(Relatively speaking)

He did some good things for Ireland in the 70s and 80s, Sadly for him it'll be Eircom that he'll be remembered for.

And we won't forget you either, Philip Nolan and David McRedmond.
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22-05-2012, 22:17   #5
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Does that not imply that infact there is no Debt interest payments now from Revenue and open the way for a DSL + Line Rental at €19 approx and investment in Network?
No. The interest payments continue on the lower debt figure - €2.3Bn. Its just that the senior creditors exchanged a haircut on their loans (15%) for equity. They're now lenders and shareholders.

If they decide to pay themselves a dividend on the shares they could end up with a higher net return than previously.
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23-05-2012, 20:21   #6
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You mean they 100% of shares according to their share of the 2.3Bn debt and Eircom STILL owes them the 2.3Bn... But they then ARE Eircom and thus owe themselves the 2.3 Bn in exact proportion. That makes no sense.

All existing shareholdings are wiped out.
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23-05-2012, 21:16   #7
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All existing shareholdings are wiped out.
The new shares aren't necessarily worth anything. Depends on the profits.
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24-05-2012, 16:49   #8
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The new shares aren't necessarily worth anything. Depends on the profits.
100% Shares would have to be worth over 2 billion or else the examiner didn't accept a good offer. The remaining bond holders i'm guessing think the company would be worth about 3 billion.

That would make the shares worth something, no?
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24-05-2012, 18:32   #9
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100% Shares would have to be worth over 2 billion or else the examiner didn't accept a good offer. The remaining bond holders i'm guessing think the company would be worth about 3 billion.

That would make the shares worth something, no?
The examiner was trying to do a deal that was acceptable to the creditors not the shareholders (STT/ ESOT). If he accepted the offer from Hutchison (and it were approved by the Competition Authority) he would have paid the senior creditors first. The existing shareholders would still have got nothing.
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24-05-2012, 21:32   #10
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If there is no Debt the Meteor is worth nearly 1 Billion and the rest very much less.

You could build a Universal Fibre Telco for under 2 Billion. STT only paid peanuts for Eircom because the Debt was more that the assets worth. They have actually only lost "loose change" getting wiped out. ESOT should never have existed and I think they still have their Vodafone shares (which they should not have got) so I won't cry for them.
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11-06-2012, 18:28   #11
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http://www.siliconrepublic.com/busin...-examinership/

Eircom said today that it has exited the examinership with new capital and shareholders in place. ST Telemedia and the Employee Share Ownership Trust are no longer shareholders.

In a statement today the incumbent telecoms operator - consisting Eircom Ltd, Meteor Mobile Communications Ltd and Irish Telecommunications Investments Ltd - says it is owned entirely by its lenders.

A new board of directors has been constituted consisting Ned Sullivan, independent non executive chairman, Nicky Hartery, non-executive director and Paul Donovan, group CEO and executive director.

The examinership process removed €1.7bn worth of debt from Eircom's balance sheet - approximately 40pc of group debt.

It is now embarking on a five-year business plan which includes a 1m home fibre broadband plan.

“A new chapter for the Group begins today," chairman Ned Sullivan said this evening.

“Our new shareholders are fully committed to a strong future for eircom. Having successfully navigated examinership and the consequent restructuring of the balance sheet, the Group can look forward to executing the next phases of its strategy," Sullivan said.

John Kennedy
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11-06-2012, 19:10   #12
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It's frightening that what they STILL owe is more than a from Scratch Fibre to everyone network would cost.
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11-06-2012, 21:00   #13
clohamon
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http://www.siliconrepublic.com/busin...-examinership/

Eircom said today that it has exited the examinership with new capital and shareholders in place.
I doubt that's 'new' capital. I suspect that they've just taken the 15% credit haircut i.e. 405M and called it share capital instead.

And there was about €300M in cash before examinership. I wonder which column that ended up in.
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