Court approval for Eircom takeover

Singapore-based STT Communications has received approval from the Federal Court of Australia for its planned acquistion of Eircom…

Singapore-based STT Communications has received approval from the Federal Court of Australia for its planned acquistion of Eircom.

The news comes a day after shareholders of its Australian parent company Eircom Holdings (ERC) voted overwhelmingly in favour of the A$225 million (€140.2 million) cash and shares offer.

STT said it now expects the acquistion to close in early January.

"In the new year, ST Telemedia will be working closely with the management and employees of Eircom Limited to determine a sound vision and strategy for the future, with a strong focus on meeting customer requirements, upgrading legacy infrastructure and generating shareholder returns over the long run," said Mr. Lee Theng Kiat, president and chief executive officer of ST Telemedia.

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The company said Eircom faces numerous challenges, including competition from well capitalised multinationals, declining revenues, legacy infrastructure, high debt burden and a fast evolving regulatory environment.

"ST Telemedia will need the support of all stakeholders including the Government, ComReg, ESOT and eircom management and employees to transform the company into an efficient operator that can contribute to the further development of Ireland's telecommunications industry," Mr Kiat added.

Eircom has welcomed the latest developments with CEO Paul Donovan describing them as "important milestones."

Following today's news, ERC is expected to delist from the stock exchange in Sydney.

Eircom is being acquired by Emerald Communications, a Cayman Islands-registered vehicle being used by STT and the company’s employee share ownership trust (Esot) to conduct the takeover of the Irish phone group. This vehicle will become Eircom’s fifth owner in little more than a decade.