Saturday 10 December 2016

Eir chief rules out IPO as trio of investors secures control

Published 04/11/2016 | 02:30

Eir (Stock photo)
Eir (Stock photo)

Completion of the sale of York Capital's 9.8pc stake in Eir means the telco's three largest shareholders now control more than 90pc of voting rights in the telecoms group, chief executive Richard Moat said yesterday.

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A stock market flotation of Eir is "at least a couple of years away," and currently occupies "zero percent" of management time, he said.

Eir pulled a planned €3bn initial public offering (IPO) in 2014. A sale of an Eir stake in May valued the business at €3.5bn.

York Capital's exit from the share register this month leaves Anchorage Capital as Eir's main shareholder with more than 50pc of voting rights. Singapore's sovereign wealth fund GIC, which only bought into the business in May, along with US-based Davidson Kempner are the other big shareholders.

That marks a dramatic consolidation since 2012, when the business ended up in the hands of more than 200 lenders following a debt-for-equity swap.

The company has begun a process to recruit new board members to reflect the new shareholder base, Mr Moat said.

The new shareholder troika supports continuing with it the current strategic approach for the business, he said. That includes maintaining its current level of capital expenditure at between 19pc and 22pc of revenues this year, he said.

With an IPO on the long finger and a major capital investment programme in mobile and fibre ongoing, transformational M&A is not on the agenda, management said yesterday.

However, the company said it may make targeted acquisitions to boost the cyber security capabilities in its business-facing arm, and will invest in sports rights for Eir Sport, the recently acquired Setanta Sports, chief financial officer Huib Costermans said.

Underlying revenue at the company rose €5m in the three months to the end of September with costs falling by €5m, EBITDA of €122m is up €2m, or 1pc, year on year, the company said.

Total subscribers to its television offering increased by 58,000 with more than a quarter of its fibre customers taking up the service, Eir said.

Ongoing investment in its mobile network means 88pc of the population now has access to 4G coverage and that will be 95pc by March, it said.

The company said it has spent €415m so far on a fibre network rollout, passing 68pc of Irish premises, and a total of €1.3bn on investment in the past three years.

Richard Moat said the quarterly results were "positive" and that the company is on track to meet its full-year targets.

Eir recently closed a consensual refinancing that shaved around €27m off its debt servicing costs. Huib Costermans said the company will not return to the debt market at short notice, but a ratings review in early 2017 might trigger discussions with lenders.

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