Eircom owners receive €446m dividend.

SkepticOne

THE consortium which owns Eircom is to receive €446m in dividends, half the amount they put in themselves to buy the company just 18 months ago.

The dividend payment will come as part of a massive €2.4bn reorganisation of the company's finances, which includes bonds and new cheaper bank debt. The move will see Eircom issue €1bn worth of 10-year fixed rate bonds, and borrow a further €1.3bn in bank debt at rates of interest 2pc to 2.5pc lower than its existing debts.

When Valentia bought Eircom in 2001 for €3.2bn, the investors put in €900m of their own money, and borrowed the rest. The biggest beneficiary is the employee share ownership trust (ESOT), which will get 29.9pc of the €446m dividend.

The other shareholders, Providence Equity Partners, Soros Equity and Sir Anthony O'Reilly, will also receive their share of the dividend.

A further €66m will be used to pay off a chunk of the preference shares held mainly by the employee share ownership trust (ESOT). Some of these preference shares carry a hefty coupon of 11.5pc.

Full article here.

Thats a very good return getting half the money back after 18 months. They will have recouped their investment after 3 years.

The article goes on:

Eircom has spent €1bn in capital expenditure in the last five years and its plan to spend a further €1bn over the next five years is secure.

Hmmm. Didn't they recently threaten to withdraw this money? Doing this would allow the investors to extract even more from the country.

Gavin

Surprising that they don't dig up the lines, melt down all the copper, sell it and vamoose !

Gav

dahamsta

Wishful thinking Gav!

adam

Paddy20

No doubt the hundreds of Euros that Eircom overcharged me without explanation or - a proper right of appeal procedure* whereby I had too pay up for internet usage charges that I maintain to this day I never could have possibly accrued has now ended up in the pockets of Individuals who imho should be behind bars [the prison type].

And Bertie & Co should be locked up along with them.

Ah well, at least they have lost out on making anymore internet access call charges from this slightly disgruntled EX EIRCOM.NET user, thanks to UTVip Lite.

toughbuk

thats a bit rich of eircom giving all their workers a share of the dividents when they screwed the public over their share issue last year when we were forced to sell for pittance and now i have worthless vodafone shares.Lost a small fortune in eircom too

ednwireland

nice to see all those price hikes going somewhere useful , i'd hate to see tonu oreilly not be able to afford his private jet or another bottle of bolly.
does anyone remember what the reasoning was for selling to tony o'reillys consortium (apart from the obvious one of providing a cash cow to keep the banks away from the rest of his missrun businesses)

irish gov bunch of thieves and robbers ( i blame them personally for this disaster)

Slutmonkey57b

Got a bit of coverage in the Sun. B. post this, but ffs HOW does the government allow a massive price hike that eircon puts down to "debts" and "below cost selling" (as quoted on the bill) followed by this MASSIVE divi?

It's the same as the Railways bull$hit in the UK where rail companies who took on franchises that were advertised as being expectedly non-profitable for 10 years demanded AND GOT money from the government, which they immediatly issued as divis.

It's plain fu.cking criminal, as usual in this $hithole country. What are ComReg going to do about it?

Sweet Fu.ck All.

FirA_Fascio

I'm sure Nolan is over the moon. Someone, quick! Send a rocket of space-assassins after him :ninja:

sceptre

Fergus Cassidy mentinons it in his Tribune column this week. Dances around the topic a bit but he does seem to dislike Eircom's monopoly (and all who support her) and vulture capitalists so much.