Friday 24 March 2017

Eircom boss steps down 'for personal reasons'

Donal O'Donovan

Donal O'Donovan

Announcement just days before firm due to file for examinership

EIRCOM chief executive Paul Donovan will leave the company at the end of the year.

The announcement of Mr Donovan's departure comes just days before Eircom is set to file for the biggest examinership in the history of the State.

Mr Donovan said he was stepping down after his current contract ends for personal reasons.

"The role of CEO requires a new multi-year commitment which I am not in a position to make," he said.

The Englishman has commuted to Dublin from his family home outside London since 2009.

Yesterday, he said he would not renew his three-year contract when it ends in June although he would stay on at Eircom to the end of the year to allow time to hire a successor.

That means Mr Donovan will still be at the helm when Eircom's secured lenders take control of the company through a debt-for-equity swap in the coming months.

They plan to implement the takeover through the proposed examinership.

Once lenders take ownership, Mr Donovan will have served under three owners in just three years at the top of Eircom -- Australia's Babcok & Brown, Singapore-based STT, and the incoming 100-strong group of lenders who are led by US private equity fund Blackstone.

Yesterday, Eircom chairman Ned Sullivan said the board regretted Mr Donovan's decision to leave: "Since joining the company in 2009, real progress has been made to transform the business," Mr Sullivan said.

Deadline

A spokesman for the lenders set to gain control of the business also praised Mr Donovan.

Meanwhile, sources said a ballot of lenders on their attitude to the examinership proposal is on course to be passed and the deadline to vote runs out today.

The plan requires a 51pc majority of both the top 'first lien' lenders and lower-ranked 'second lien' lenders.

Indications last night are that the plan will be passed comfortably. If it is, the Eircom board and management will then move to apply for examinership and are expected in the High Court to make their application as early as tomorrow.

Under the plan, all non-financial debts such as money owed to employees and suppliers will be honoured but €1.7bn owed to banks and bondholders will be written off.

Top lenders will be given ownership of the company in exchange for writing off 15pc of the €2.4bn they are owed.

Irish Independent

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