Monday 24 June 2019

BCM shareholders vote to cut ties with parent

Aileen Lee

An overwhelming 96pc of the shareholders of potential takeover target Babcock & Brown Capital (BCM), which has a 57.1pc stake in Eircom, have voted in Sydney to cut ties with its bankrupt parent company, Babcock & Brown (BNB).

In a low-key emergency general meeting, almost 91pc also voted to change BCM's name to Eircom Holdings Ltd, to reflect its new status as a separate entity and its majority stake in the Irish telecoms company.

Investors also voted heavily against two resolutions which would have given Andrew Day, the company's new chief executive, 1.5 million free shares, as well as a termination payment, should his job with BCM be terminated within the first 12 months of his two-year contract.

BCM is the subject of an unsolicited offer from TaemasBridge, which involves a number of former BNB executives including Rob Topfer.

Earlier, Mr Topfer threatened to withdraw the approach from his TaemasBridge vehicle if BCM's shareholders voted in favour of the Mr Day-related resolutions.


Mr Roxburgh confirmed there were a number of proposals regarding the sale of BCM, though he would not name any of the other parties.

The Irish Independent has reported in the past that Singapore Technologies Telemedia made an offer although it is not clear if this will result in a bid for the firm.

TaemasBridge's proposal has faced opposition from Eircom, the unions and Eircom Share Ownership Trust (ESOT), as well as BCM itself.

Mr Roxburgh said: "We need to find out how it works before we make a call on whether that proposal is one we should entertain."

ESOT owns 35pc of Eircom and it is understood that one of the options going forward would be for ESOT to increase its stake in BCM. Eircom already said it was looking at alternatives to the TaemasBridge offer.

Mr Day said BCM was committed to working with ESOT to improve Eircom's position in the telecommunications market.

"The ESOT does have some rights under the shareholders' agreement and the shareholders agree to hold back on some particular things such as compulsory redundancies. We believe we can work through that constructively with them," he said.

Mr Day, who is based in London, said that he would be attending a two-day meeting at the end of the week with Eircom's board of directors to decide on key measures for the company going forward.

Should TaemasBridge's proposal prove successful, it has indicated that it would seek concessions from the Irish Government in order to make a quick profit for BCM's shareholders. Mr Day said it was important that there be a strong Irish connection between Eircom and the Government.

Despite Eircom being saddled with €4bn in debt, Mr Roxburgh rejected any claims that the telecoms company would default in the near future.

"The premise there is that Eircom will default; however, on the numbers and the forecast we're receiving out of Eircom, there is no looming default."

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