Monday 26 September 2016

Eir anticipates €10m windfall this year from its property sales blitz

Published 01/05/2016 | 02:30

It is due to repay a
It is due to repay a "very expensive" €350m bond shortly and expects another upgrade from ratings agencies in the next 12 to 18 months.

Eir expects to make €10m in cash this year from the sale of chunks of its vast property portfolio.

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The company has around 1,000 properties on its books and has earmarked many of these for sale as chief executive Richard Moat returns the telecommunications incumbent to a stable footing and continues to find savings opportunities.

Eir has already made around 2,500 redundancies in recent years as part of a massive restructuring plan designed to bring debt back to more manageable levels.

The current property sell-off includes Eir facilities on Dublin's Sandwich Street and at Temple Hill in Cork, chief financial officer Huib Costermans said.

"They are all properties we have vacated, located around the country. We are selling them individually rather than as a portfolio to make sure they attract local buyers when possible." Property sales will continue in 2018, Costermans added.

The company has reached a "turning point in terms of business performance", Moat told the Sunday Independent.

Having just reported its fourth consecutive quarter of revenue and earnings growth, it is also on the verge of cutting the cost of its debt.

It is due to repay a "very expensive" €350m bond shortly and expects another upgrade from ratings agencies in the next 12 to 18 months.

Eir will clear the €350m bond, which it pays 9.25pc interest on, either by issuing a new cheaper bond or by extending its loans. There has been an "amazing improvement in debt markets in recent weeks", Moat added "meaning there is a lot more appetite for potential refinancing which makes life much easier".

Moat said he could "understand people's frustration" at recently announced delays to the National Broadband Plan, which his company is bidding for. The government has said that the plan, which promises subsidised modern internet to 750,000 non-urban homes and businesses by 2020, will not start this year as intended.

The setback means that completion of the scheme may not happen until 2022 or later, 10 years after it was first launched.

Eir expects to have rolled out fibre broadband to 100,000 of the homes earmarked for the National Broadband Plan by the end of the calendar year. Critics have said the company is cherry-picking the easiest-to-reach homes contained in the scheme, making the project less viable.

Moat said he did not accept this. "I don't see that argument at all. If we build more, the burden is less on the taxpayer. The Department of Communications asked companies to make their intentions clear at the start and we did that. We're doing what we think is best for Ireland."

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