Eircom has appointed Morgan Stanley to advise it on the sale of the company, it revealed today. The company is expecting to receive proposals from interested parties in mid-March.
"ERC Ireland Holdings Limited ('the company') today confirmed that the directors of the company have authorised the initiation of a process to assess the interest of third-party strategic and financial investors in a sale of the company," Eircom said in a statement.
“This process will be conducted as part of the wider balance sheet remediation process currently under way," Eircom said.
The move follows extensive negotiations between Eircom and its senior lenders.
In December, a €200m proposal to restructure Eircom by shareholder ST Telemedia (STT) was rejected by the Irish incumbent operator's first lien lenders and as a result STT members of Eircom's board resigned with immediate effect.
Eircom said today that first and second-lien lenders voted to extend a "covenant waiver" on the company's €3.65bn debt until 31 March, once again enabling it to avoid liquidation.
Hmmm... I'll take it if they pay me €2.5Billion. Getting it for €1 would be too expensive.
Would it be insane for the state to buy it back or maybe even a semi state like the ESB.
Yes even if eircom do get bankrupt, it is not like the network will cease to exist. The business entity will die and someone else will buy the network (hopefully someone that knows how to run one next time).
Not that the current crowd don't but how can you run a network with that much debt?
Best thing for Consumer and Network would be a failure and firesale. Then the new owner would have the assets without the debt. Of course very bad for the
gamblers people that loaned the money for leveraged buyouts.
Yes. In fact insane for any one to "buy" it. You need paid to take it away, or else a halving of the debt.
Currently you could do your own national fibre network from scratch for nearly 1/2 the Debt.
It would make perfect sense for the government to purchase the network side of the business.
Retail part should be sold seperatly altough unfortunatly over recent years management have merged departments across the two sides of the business making seperation difficult.
It does but it's not going to happen with FG and the new right-wing Labour in charge, so it doesn't really bear talking about.
We currently have an excellent value for money bundle from Eircom including 8MB NGB.
We are the lucky one's i know in that we live close to an exchange and get just about the full 8meg speed (which easily serves our needs) and unlimited downloading
Alongside that the cost of calls are virtually zero.
The bundle we have is no longer available to new customers.
My question is could a new owner simply take us off that bundle and set the price to anything they want?
Haha right wing Labour...it sure seems like that ok.
This is all down to capitalism 101, investors take risks, sometimes they win sometimes they lose. That's the nature of capitalism. Some of the "investors" ran away with millions, this current lot should get burnt. There should be no bailout for the vulture capitalist investors in eircom.
eircom should be put out of it's misery by going into administration, once and for all. A debt mountain of nearly €4bn means that as a company it's insolvent.
Even the network, at this time, is almost worthless, years of underinvestment and neglect have left it that way. The whole debacle is a sorry indictment of the stupidity of pointless wholesale privatization without any real or effective form of regulation.
I don't think it's worthless and I don't agree with the oft-bandied FTTH-or-nuthin argument. DSL is just fine for most, FTTH is a massive project that'll have to be gradual in Ireland. It'll take decades.
I'd like to see Eircom liquidated, I think admin will result in more of the same. And if possible, I'd like to see the liquidator forced to sell wholesale and retail separately, with contracts preventing reintegration.
Don't get me started on new labour, they offend me; particularly people like Rabbitte who have completely flipped their outlook. When all the Left have left is Sinn Fein, I feel like giving up.
Of course it's worth about €1.5Billion to €2.2Billion if there was no Debt, but the Debt is nearly twice the worth.
Almost all of that Debt represents money in pockets of ESOP and due to leveraged buyouts of people that asset stripped. There has not been ANY net investment before STT. Just milking it and increasing the Debt.
The AVERAGE speed for DSL is 3Mbps. Nearly 50% can never achieve 3Mbps on DSL. You need fibre at least to cabinets.
Also line rental is crippling expensive in Ireland. The price of 10Mbps ought to be about €15 to €20 including line.
Network & retail should have been privatised separately.
There should be safeguards against asset stripping and leveraged buyouts.
The World Bank now uses Eircom as a case study on the worst possible outcome of Privatisation of State Infrastructures.
The Deja-vu is so strong, I've actually forgotten what year it is
The fundamental problem with Eircom is that Ireland is a terrible market for landlines and DSL. The couple of cities in Ireland are fine, but the second you get out of the suburbs you have this nonsense of running miles of cable for a few houses.
I experienced this first hand getting a new line to a house outside a city. I asked Eircom day one if I could get broadband, they said yes. They then went through all the hassle of setting up everything only to realise I was too far from the exchange, and I had to cancel the whole lot. I have since then gotten a wireless provider. I just wonder how many times this has happened and how much it has cost the company.
I don't think any private company can keep up eircoms current setup. In my opinion the infrastructure should be kept and upgraded for areas with the population. Lower density areas should be switched to a mobile setup ( a proper one mind you, not dodgy 3G).
I could see a private company doing the dog if they got eircom, and just cutting off customers that are too much hassle for line maintenance.