EIRCOM’S SYNDICATE of first-lien lenders will meet on Monday to discuss their co-ordinating committee’s proposal to take over the heavily indebted business, which has breached its lending covenants.
It is understood the company will also update lenders on its trading performance in October. This is likely to show continuing difficult trading conditions.
Eircom’s request for a further extension to the waiver on its covenant breach is also set to be debated. The current waiver expires on December 15th and an extension until January 31st is being sought.
Eircom’s independent directors last week received two proposals to restructure its €3.7 billion net debt. This included a proposal from first lien lenders, who are owed €2.4 billion, to take full control of the business.
They would take 100 per cent of the equity in return for writing down their debt by 7 to 9 per cent. They would also agree to extend the maturity of the debt to September 2017.
Second lien lenders, who face having their debt either wiped out or substantially reduced, have also tabled a proposal.
Eircom’s shareholders – Singapore-based ST Telemedia and the employee Esot – did not table a proposal by the December 2nd extended deadline.
Eircom’s independent directors met last Monday to discuss the proposals received but have yet to make a recommendation to the full board of the company.
STT signalled last week that it had not submitted a proposal due to the euro zone financial crisis. Sources said it had not indicated any change to this position in recent days.
The unsatisfactory outcome of the EU summit in Brussels this week might well have reinforced its decision not to participate in a restructuring of Eircom’s debts.
