Business Irish

Thursday 19 October 2017

Plan rescuing Eircom from insolvency 'to be agreed'

Donal O'Donovan

Donal O'Donovan

A binding scheme to rescue Eircom from insolvency by handing the company to its top lenders could be finalised today, according to sources close to the situation.

If an agreement is signed, it will end plans by the owner of 3 Mobile to buy Eircom out of examinership.

An "investment agreement" between Eircom's court-appointed examiner Michael McAteer, the company and its secured lenders is understood to have been timetabled to be agreed and announced today.

Eircom filed for examinership on March 29. The process gives the company 100 days of court protection from its creditors in order to put together a viable business plan.

Support

Eircom's top lenders, shareholders and management had all indicated their support for a rescue scheme before the company sought court protection.

Under that plan, ownership of Eircom will be handed to secured lenders owed €2.6bn -- they will write off a portion of what they are owed in exchange for taking over the company, but are insisting that €1.8bn of debt, mostly owed to separate classes of lenders, must be written off with the court's approval.

Mr McAteer has the power to agree a binding deal with creditors to back the plan. If he does, it effectively ends any rival bidder's hope of a last-minute alternative.

In Eircom's case, the examiner is working to a timetable that would see the courts sign off on a rescue on May 24.

To meet that aggressive timetable, a binding agreement would need to be in place well in advance of the final hearing.

That could happen today, unless efforts by Hutchinson Whampoa -- the Hong Kong-based owners of 3 Mobile -- can upset the timetable.

Last week, it emerged that Hutchinson Whampoa had made a €2bn cash offer to buy Eircom before a deadline for offers expired on April 23.

That offer was rejected by the examiner.

Irish Independent

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