Monday 10 December 2018

French billionaire will have sole control of Eir after deal

French billionaire Xavier Niel
French billionaire Xavier Niel

Gretchen Friemann

Controversial French billionaire Xavier Niel will assume 'sole control' of telecoms operator Eir via two separate holding companies, the Irish Independent can reveal.

Documents lodged with the EU Commission, as part of a takeover approval process, lay bare the new ownership structure and reveal Eir will ultimately be housed in a company called Carraun Telecom Holdings Ltd, if the deal announced in December goes through.

This freshly created entity will fully own Toohil Telecom Holdings, the vehicle Eir shareholders agreed a deal with in December.

The referral document lodged with the EC states that Mr Niel will acquire "indirectly, within the meaning of Article 3 (1) (b) of the EU Merger Regulation, sole control over Eircom Holdco SA and all the companies it controls."

That's despite other shareholders retaining minority stakes.

The document also states that Carraun - the parent of Toohil - is 64.5pc owned by Mr Niel's company NJJ Boru SAS, which is formed by Mr Niel's privately-held NJJ Tara SAS entity as well as the Paris-listed Iliad

Existing Eir shareholders, Anchorage and Davidson Kempner will retain stakes of 26.6pc and 8.9pc in Carraun respectively. In a statement announcing the deal last month, Eir said a majority stake was being acquired "by a consortium led by NJJ Telecom Europe".

It is not clear why Carraun's existence was not unveiled at the time of the takeover announcement.

A spokesperson for Mr Niel declined to comment on the reason for the multi-layered ownership structure however it is understood tax concerns played no part in the strategy.

Legal experts pointed out such layering is typically used to facilitate the issuing of debt at various levels of a corporate structure. Filings to the Companies Registration Office show the directors of the two vehicles are A&L Goodbody lawyers.

The French entrepreneur's takeover of Eir, which values the company at €3.5bn, requires authorisation from the EU Commission, as well as the Minister for Communications, Climate Change and Environment Denis Naughton and the Broadcasting Authority of Ireland.

At home, the French entrepreneur has had a successful but at times controversial career. He's a co-owner of 'Le Monde', the newspaper, but was briefly jailed after a 2004 investigation found peep shows where he was an investor had been linked to prostitution.

Although he avoided a conviction, the probe found he'd failed to declare his income from the business.

Meanwhile, and as anticipated, the holders of €700m of outstanding senior secured notes due in 2022, waived their right to an early repayment yesterday.

The bondholders' approval - gained via a consent solicitation process - forestalls an early repayment commitment triggered under a change of control.

Irish Independent

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