Eircom tells lenders revenue still plunging
Company reveals it received two debt restructuring proposals and a separate takeover approach
REVENUE at Eircom continues to plunge, the company was forced to tell lenders yesterday. Eircom also admitted its accounts were not ready for its lenders.
Management confirmed that the company has received two proposals to restructure its €3.7bn of debt as well as a separate takeover approach.
Eircom's debt crisis means the company must give regular, detailed financial accounts to lenders. Yesterday, management was forced to admit that audited financial statements were not ready to be shared with the lenders on time for the latest deadline. They will be ready by the end of November instead of October 28, the company said.
Instead the lenders got a briefing with estimated numbers.
A lender source told the Irish Independent that there was little if any concern among the creditors over the delay. Lenders were well aware of the pressures currently piled on Eircom, the source said.
Still, the delay highlights the extent to which Eircom's managers are being distracted by the effort to cut its €3.7bn of debt.
Eircom held a conference call with lenders to brief them with the latest numbers. Management also confirmed the company has received an approach from a third party -- not currently a lender or shareholder.
The company did not reveal the name of the prospective new investor, which is understood to have expressed an interest in taking a stake in the business when the current debt load is cut, probably by offering to pump cash into the business.
Asian conglomerate Hutchison Whampoa, which owns the 3 mobile phone company, is reported to have made an approach for Eircom.
But last night a source said lenders also received an approach from a third party which is not from Hutchison Whampoa. Eircom refused to say who the approach to the company was from.
A spokesman for Eircom said lenders were informed that trading at the company was in line with management expectations, but continued to fall.
Income is falling in both the fixed line and mobile divisions. Eircom said it was losing market share in broadband and mobile broadband. The company is only able to keep trading thanks to lender support.
Eircom is majority owned by Singapore Technologies Telemedia (STT). The Singaporean investor offered to hand 20pc of the company and €300m in cash to the top-ranked lender.
In return the top-ranked lender will back STT's plan to force losses on other lenders owed over €1bn.