EIRCOM’S INDEPENDENT directors are expected to receive two proposals today relating to how the company might restructure its €3.7 billion net debt.

The company’s shareholders, Singapore-based STT and the employee Esot share trust, will table a proposal that would involve an injection of about €300 million into the business.

It is understood that the Esot would contribute €40 million to this proposal.

STT would provide the vast bulk of the new equity but there is a possibility that the pair could be joined in their proposal by London-based Communications Ventures Partners (CVP).

Negotiations were still taking place late yesterday. Sources indicated that CVP could contribute about €40 million in equity to the proposal if it decides to invest.

The shareholder proposal would dilute STT and the Esot’s holdings and result in first-lien lenders getting a near 20 per cent stake in the business as part of a debt-for-equity swap.

STT currently owns about two-thirds of Eircom, while the Esot holds the balance. They assumed ownership of the business on January 4th, 2010.

An alternative proposal is also expected from second-lien lenders to the company, who face losing all of their money in the restructuring.

Earlier this week, Irish businessman Denis O’Brien, who owns the Digicel mobile phone company in the Caribbean, said he would not be tabling an offer for Eircom.

Eircom breached its banking covenants in the summer. Its earnings are in decline due to the effects of the recession and competitive pressures and it is struggling to manage its debt load.