The resurrected telecoms group Smart has completed a €65 million refinancing and plans to bid for a Government broadband contract.
The company, now known as Smart Yuroe Broadband (SYB), said yesterday that it had raised €50 million in debt from Irish and European financial institutions. It has also converted a further €15 million in debt owed to shareholder Brendan Murtagh into preference shares.
The chief executive, former Princes Holdings chairman John O'Riordan, said yesterday that the company was also planning to bid to operate the Government's rural broadband scheme.
This project is designed to bring broadband services to thinly-populated or remote rural areas where a normal commercial service would not be viable.
Mr Murtagh, one of the two brothers behind building materials and technology group Kingspan, held 20 per cent of Smart Telecom plc and rescued the business last year when it was floundering with a €40 million debt and losing €2.5 million a month.
Calally, a company 90 per cent-owned by him, took over the business, while Smart Telecom plc took the remaining 10 per cent.
Calally has been renamed SYB. Smart still holds 10 per cent of SYB, while Mr Murtagh owns 50 per cent.
Its other backers are Mr O'Riordan and Tom Jones, one of the original investors in Smart. Both men hold 20 per cent of its stock. They and Mr Murtagh also hold preference shares in direct proportion to their ordinary stock.
Mr Murtagh has merged his T50 broadband network in Dublin with SYB, which the company said yesterday has added a further €25 million to its balance sheet. Smart has been using the network to service customers in the Dublin area.
The €50 million in debt has been raised through the issue of loan notes to the institutions involved.
Bank of Ireland's Kernel Capital Partners private equity fund invested €2.5 million last month.
While issuing preference shares means that the company can take debt off its balance sheet, Mr O'Riordan said their holders would be "subordinated" to the debts owed to the financial institutions. This means that if the company was wound up the institutions would be repaid before the preference shareholders.
Yesterday, Mr O'Riordan said that SYB intends to use €16 million of the cash raised to speed up payments of some of the debts left by the original Smart business.
It is planning to invest a further €8 million in recruiting new residential and business customers to its broadband data and voice-over-internet services.
