Examinership cost Eircom €63m
Published 20/04/2013 | 05:00
Firms from New York's Wall Street to London's Silk Street split €63m in fees for advising Eircom as the Irish company navigated through Ireland's biggest-ever examinership process.
Newly filed accounts show that the company paid advisors €10m in the financial year to the end of June 2011 and a further €53m the following fiscal year as it struggled to survive.
Eircom entered examinership early last year as it sought to restructure a crippling €4bn debt pile.
It emerged from the process in June last year having reached agreements with lenders that saw its debt mountain reduced to €2.3bn. The examinership process was led by Michael McAteer of Grant Thornton.
The advisors to Eircom and lenders included six law firms, five Wall Street investment banks, and three of the world's top five accountancy practices.
Among the firms that advised Eircom were JP Morgan, London-based Gleacher Shacklock and law firm Linklaters.
"As part of the overall financial restructuring, Eircom was party to various agreements entered into with professional advisors which provided for the payment of fees upon the successful restructuring of the group's debt and other fees for services provided prior to the completion of any restructuring transaction," notes Eircom in its accounts.
Those accounts also show that Eircom's group revenue declined 10.7pc in the last financial year to €1.51bn.Adjusted earnings before interest, depreciation, taxation and amortisation (EBITDA) at its mobile unit – which includes Meteor – slumped 85pc to €9m. Revenue at the mobile arm fell 9pc to €372m.
At its fixed-line business, revenue fell 10.5pc to €1.19bn, while adjusted EBITDA fell over 9pc to €533m.
Eircom made an overall operating profit of just over €1bn last year as it recorded a €769m exceptional gain related to the outcome of the examinership process.
Eircom is still cutting jobs, with plans to lay off a total of 2,000 workers, bring employee numbers to 3,500.