Wednesday 17 July 2019

B&BC boss claims tiger economy is a 'pussycat'

Eircom owners frustrated at refusal to allow firm’s separation

Tom McEnaney

Rob Topfer, an executive at Eircom owner Babcock & Brown Capital (B&BC), has dismissed the Irish economy as a "pussycat".

According to the Australian newspaper, 'The Sydney Morning Herald', Mr Topfer told shareholders in B&BC recently that while the Irish economy used to be the tiger of Europe, it was now a mere pussycat.

Mr Topfer is also reported to have said that he was "unhappy the Irish Government was not playing ball on separation".

B&BC wants to split Eircom into a retail part and a network part and then sell off the retail division, leaving a network operator which would have access to funds at a lower rate than traditional telecos.

Neither the Government nor the regulator has endorsed these plans although Comreg, the communications regulator, has appointed consultants to advise on what form any separation might take.

The Australian newspaper says that Esot, the employee shareholder trust which owns 35pc of Eircom, has received a report from banker Rothschild which is critical of separation. An Esot spokesman said yesterday this was untrue and no report had been commissioned.

B&BC's failure to make the Irish telecoms network the first in the world to be completely separated, has left its share price languishing. However, sustained pressure from hedge funds has forced B&BC, which is sitting on cash fund of Au$460m, to agree a buyback of up to 50pc of its own shares. The shares, which floated at Au$5, are now only trading at Au$4.44.

The Australian newspaper revealed the codename given to the initial Eircom project as 'Project Seamus'. In light of cultural sensitivities, that would be like an Irish private equity player preying on Telstra (the Australian incumbent) with the codename Project Bruce.

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