Pressure piles on Eircom from second lender group over debt
A second group of lenders to Eircom has emerged to put further pressure on the company over its debt pile.
A vote by senior lenders to Eircom on whether to allow the company a 'waiver' over repaying its debts has given a second group an opportunity to insist on being recognised in debt talks.
Eircom has already recognised and engaged with one co-ordinating committee elected by senior debt holders.
A second lender group that controls around 20pc of senior debt, in a mix of first-lien and second-lien loans, is pushing hard to be recognised in its own right as a negotiating party.
Senior debt is made up of two slices of first-lien and slightly subordinate second-lien loans.
This second group is being advised by Wall Street investment bank Moelis & Company, and has long pushed without success for separate recognition because it holds mainly second-lien loans, unlike the committee that has been dealing with Eircom.
A vote on Eircom's covenant waiver consent request has given the group a chance to push its demand again.
Eircom's sprawling lender group give the demand added strength, because without both big groups on board it could be a struggle to reach the two- thirds majority needed to get a waiver passed.
The second-lien lenders are understood to be willing to take a more aggressive stance on restructuring Eircom than most members of the co-ordinating committee. Its members are to contemplate putting up new cash in order to play a major role in a restructuring, including taking on a degree of ownership, according to sources involved in the debt.
In the company's favour, however, is the fact that neither of the two main senior lender groups is big enough to block a deal and is currently pushing to be recognised by the company as a negotiating party in the wider debt talks -- including having fees from its advisers paid for.
The full group of senior lenders will hold a conference call on Wednesday to discuss the covenant waiver request sent out by the company last Friday.