Wednesday 14 November 2018

Eir's billionaire owner refinances personal holdings

Connected: Telecoms entrepreneur Xavier Niel bought Eir through Iliad and his investment vehicle NJJ. Photo: Bloomberg
Connected: Telecoms entrepreneur Xavier Niel bought Eir through Iliad and his investment vehicle NJJ. Photo: Bloomberg
Donal O'Donovan

Donal O'Donovan

The French billionaire owner of Eir, Xavier Niel, has pledged almost half of his stake in his main French telecom company, Iliad, as part of a financing for his personal holding company.

Mr Niel "reorganised and simplified all of his holdings in recent months", Iliad said in a statement yesterday.

"The purpose of this reorganisation is, in particular, to allow him to better structure his projects in telecoms."

Iliad is valued at around €6.75bn.

The majority of his shares are now owned by a holding company, and not directly by Mr Niel, according to the statement.

Along with the reorganisation, Mr Niel put in place financing for the holding company to strengthen its liquidity and diversify its sources of funding, according to the statement.

He pledged 14.8 million shares as part of that deal, Mr Niel said.

Mr Niel, 51, is Iliad's deputy chairman and chief strategy officer. He owns 52pc of the company, or about 30.8 million shares.

The stock has slumped more than 40pc this year as the company lost mobile-phone and broadband customers to competitors in its home market.

At the same time, Mr Niel has expanded his operations into Italy, and into Ireland by buying Eir.

Iliad said on Tuesday it added clients in July and August, lifting the shares by 6.6pc as investors speculated the worst is over for the company.

Mr Niel's acquisition of Eir earlier this year placed a €3.5bn enterprise value on the Irish business - including debt and equity. The equity element was about €1.4bn.

The telecoms entrepreneur, acquired Eir via Iliad and NJJ, his investment vehicle.

The acquisition of Eir is the telco's ninth change of ownership in the past two decades.

It catapults the Frenchman to the top of Ireland's corporate pecking order, given the importance of the former monopoly's infrastructure assets.

Before Eir's own sale was finalised, the company pulled out of the tendering process for the State-funded national broadband plan (NBP).

The Government is due to announce a contract with Enet for the NBP this month.

Eir CEO Carolan Lennon said this week that it will support the project, including providing access to its infrastructure.

Eir also signalled the end of the copper landline in Ireland with a €1bn plan to replace them with fibre lines throughout the country within five years.

Eir financial results show a 2pc fall in annual revenue to €1.27bn and a 2pc rise in its earnings before interest, tax, depreciation and amortisation to €531m over the past year.

The company is currently in the final stages of laying down 330,000 fibre-to-the-home broadband connections in rural parts of Ireland under an agreement with the Government.

Additional reporting Bloomberg

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