Eir defends bond issue that saw €400m payout
Eir has insisted it won't return to capital markets until its €1bn network investment programme is completed.
The telco - now majority-owned by French firm Iliad and a company controlled by Iliad founder Xavier Niel - has also defended a recent bond and loan refinancing that saw it take on more debt in order to make a €400m payout to two US hedge funds - Anchorage Capital and Davidson Kempner.
It made the pledge on capital markets yesterday as it reported third-quarter results.
Its revenue in the three months to the end of March fell 2pc to €310m, while its earnings before interest, tax, depreciation and amortisation (ebitda) was 7pc higher at €147m.
The ebitda increase was boosted by staff cuts, insourcing of its customer care and sales, and streamlining non-pay activities, it said. Its operating cost savings were €19m in the period. Its revenue decline was a result of a fall in fixed-line revenue.
Eir CEO Carolan Lennon insisted that the refinancing, which saw it issue of €1.1bn in debt to refinance €700m of bonds and pay the hedge funds, was completed "on the back of significant deleveraging since our acquisition last year".
She said that deleveraging had seen its net debt to ebitda ratio fall from 4.1 times in June 2017 to 3.6 times by this March. The ratio this June will be back at the level seen in June 2017.
Eir added that the three major ratings agencies have confirmed their corporate scores for the company, "highlighting the confidence they have in our business".
However, ratings agency Fitch did say last month that the extra debt being attached to Eir as a result of the refinancing would add short-term leverage pressure on the telecoms firm.
In 2012, Eir went into what was the country's biggest ever examinership with what was then a crippling €4bn debt pile.
It successfully emerged from that process the same year, with lenders seizing control of the business under the process. Its debt at the time was slashed to €2.3bn.
Ms Lennon said the recent refinancing had been "extremely well received by the market".
"The significant demand from investors allowed us to raise more than originally planned, ahead of schedule, and at significant lower pricing for our bonds," she said.
"This ensures that our financing is secured for the medium term and that our €1bn network investment programme will be complete before we return to the capital markets."