Early Christmas for Eircom staff as €45.7m ESOT windfall arrives
The trustees of the Eircom share ownership trust have approved a payment of €45.7m to its members bringing the group's total takings to date to over €600m tax free.
The windfall, averaging €3,300 per member, will be made in November to the 14,300-odd members who are eligible for the payment.
The maximum per member payment this time round was just under €4,600 while the maximum for the year was just over €12,000 although figures vary for Employee Share Ownership Trust (ESOT) beneficiary.
At each allocation date, shares are notionally allocated equally between all staff who are eligible to participate on that date regardless of position or pay level.
Earlier this month the trustees issued a notice of redemption of 45.7m shares which were converted to cash for payment purposes. Back in May, the trust, which owns 35pc of the incumbent, distributed €80m to its members.
The payment came through the distribution of some of the preference shares the trust received at the time of Eircom's takeover last year by Babcock & Brown Capital.
Under the terms of the ESOT, it must disburse its assets to members by 2014. It is made up of past and present employees at Eircom.
Under ESOT legislation only €12,650 per member per year can be distributed tax-free and the group is expected to distribute its assets by 2014.
It is understood that the ESOT has sufficient cash and preference shares to enable it make the maximum tax-free payout to beneficiaries for the next two years. After that date it will need to find a mechanism to realise the value of its 35pc in Eircom.
Meanwhile, telecoms regulator ComReg has advertised for consultants to advise it on the proposed split of Eircom into two separate divisions ahead of the sale of the retail arm of the company by Babcock.
Consultants are expected to be appointed in December. ComReg filed an EU tender notice earlier this week.
It is not yet clear how the ESOT and Babcock would divide their interests in the event of a separation.
If Babcock's plan goes ahead it will mark a first for a structural separation of a company.
- Ailish O'Hora
