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eircom : the slide begins?

  • 09-02-2012 5:01pm
    #1
    Registered Users, Registered Users 2 Posts: 4,051 ✭✭✭


    http://pressroom.eircom.net/press_releases/article/erc_ireland_finance_limited/

    ERC IRELAND FINANCE LIMITED

    This press release includes forward-looking statements. These forward-looking statements include statements regarding the intentions, beliefs or current expectations of ERC Ireland Finance Limited and its subsidiaries, including ERC Ireland Holdings Limited and eircom Limited (together “eircom”, which term may also refer to only specific members of the group where the context so permits) concerning , among other things, eircom’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which eircom operates, or matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties set forth in eircom’s other periodic reports, because they relate to events and depend on circumstances that may or may not occur in the future. eircom cautions you that forward-looking statements are not guarantees of future performance and that the actual results of operations, financial condition and liquidity and the development of the industry in which eircom operates may differ materially from those made in or suggested by the forward-looking statements contained in this release. In addition, even if eircom’s results of operations, financial condition and liquidity and the development of the industry in which eircom operates are consistent with the forward-looking statements contained in this release, those results or developments may not be indicative of results or developments in future periods. eircom does not assume any obligation to review or confirm analyst expectations or estimates. Additionally, eircom does not assume any obligation to comment on, update or revise the statements included herein or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release. eircom does not (by issuing this press release or otherwise) assume any obligation to issue any further or other press releases, announcements or trading updates at any future time whether relating to matters referred to in this press release or otherwise.

    The Senior Notes have not been registered under US Securities Act of 1933, as amended (the “US Securities Act”), or any state securities laws, and were offered and sold only outside the United States pursuant to Regulation S under the US Securities Act and to “qualified institutional buyers” in the United States in reliance on Rule 144A under the US Securities Act.



    Statement for Public Release

    ERC Ireland Finance received notice yesterday that ERC Ireland Holdings Limited’s senior lenders have exercised their rights to suspend payments by ERC Ireland Holdings and its subsidiaries of amounts that fund FRN coupon payments, including the payment scheduled for 15 February 2012.

    The payment suspension does not impact on the continued operation of the Group’s business. All eircom and Meteor services and payments to suppliers continue as normal.

    The eircom Group continues to work closely with its senior lenders on the balance sheet remediation process to provide a sustainable capital structure for the Group.


Comments

  • Registered Users, Registered Users 2 Posts: 4,051 ✭✭✭bealtine


    http://www.siliconrepublic.com/business/item/25818-eircom-misses-payment-to-le

    Incumbent telecoms operator Eircom said today it has not made the bond payment to lenders that was scheduled for 12 February.

    Eircom, which is lumbering under a massive €3.65bn debt, is expecting to receive offers by potential buyers in mid-March.

    “Further to the announcement on 9 February 2012, ERC Ireland Finance confirmed today it has not made the FRN coupon payment scheduled for 15 February 2012."

    Floating rate note (FRN) coupons are bonds that pay out interest every few months.

    Eircom said the non-payment does not impact on the continued operation of the Eircom business.

    “All Eircom and Meteor services and payments to suppliers continue as normal.

    “The Eircom Group continues to work closely with its senior lenders on the balance sheet remediation process to provide a sustainable capital structure for the group," Eircom said.

    Last month, Eircom appointed Morgan Stanley to oversee the sale of the company.

    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.


  • Registered Users, Registered Users 2 Posts: 721 ✭✭✭mk6705


    Eircom should never have been sold by the government. Now, we're left with a commercial company in huge debt being forced to both provide lines and retail phone services. The system as it is is unsustainable and won't do. The mess that has been created involving regulators, debt and general mismanagement of our communications infrastructure is disgraceful and there is no easy solution. From the title I'm wondering if you think Eircom collapsing would be a good thing or something. It's a sensitive situation, none of this "destroy Eircom now" crap is going to work, in a country where there is no incentive for an infrastructure provider to improve anything. The most practical approach would probably be a separation of infrastructural and retail Eircom, but that still leaves many many problems.


  • Registered Users, Registered Users 2 Posts: 32,417 ✭✭✭✭watty


    Cheapest way to do that is buy the infrastructure after they go bust. Because then it won't be loaded with Debt. The bondholders will have taken the loss.


  • Registered Users, Registered Users 2 Posts: 4,051 ✭✭✭bealtine


    Adro947 wrote: »
    It's a sensitive situation, none of this "destroy Eircom now" crap is going to work, in a country where there is no incentive for an infrastructure provider to improve anything. The most practical approach would probably be a separation of infrastructural and retail Eircom, but that still leaves many many problems.

    I simply don't see how you infer the "destroy eircom now" from the title of the thread? This is not a "hate eircom" forum as you imply. We are more worried in general about the overall state of telecoms in Ireland.

    The thread is simply pointing out that the slide of eircom is now beginning and it is fascinating to see where the slide brings us. Will the company be liquidated and Ireland buy the backbone assets of the company to add to already in place state owned fibre assets? Will the company just wither and die? Will the company continue to limp along with minimal to no investment? And so on.
    The only thing worth any value in eircom is the core network, the rest is rotten (degraded beyond all usefulness) and pretty useless. The core network does have some value but the value is minimal unless people or operators can connect to it.
    It is also a sad indictment of the utter futility of regulation in Ireland, nearly all the regulators are captured and care more about regulating for the industry, thereby pocketing more fees, than they do about looking after the interests of consumers.

    The sale of eircom is a salutatory tale of how to mess up a privatization and ruin a reasonably good company and let it loose so the vulture capitalists can asset strip the company, like Tony O Reilly for instance that walked away with a cool billion.


  • Legal Moderators, Society & Culture Moderators Posts: 4,338 Mod ✭✭✭✭Tom Young


    The company will enter Examinership here, or administration in the UK.

    The network and company should be relatively unaffected.

    Tom


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  • Registered Users, Registered Users 2 Posts: 4,051 ✭✭✭bealtine


    Tom Young wrote: »
    The company will enter Examinership here, or administration in the UK.

    The network and company should be relatively unaffected.

    Tom

    That does seem to be the most likely outcome ok.


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