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Government will find itself competing with Eircom for purchasers' money

It isn't just the state sector that is seeking to dispose of Irish assets to the highest bidder.

The Eircom examinership means that Ireland's biggest fixed-line telephone company is also looking for a new owner, its sixth in just over a dozen years.

The €8bn Eircom flotation in the summer of 1999 remains by far the largest-ever Irish privatisation.

Now, five owners and almost 13 years later, Eircom has had to ask the High Court to protect it from its creditors, to whom it owes more than €4bn.

The internet mania that briefly took the Eircom share price to €5 in the wake of the privatisation -- valuing the company at more than €10bn -- is now but a distant memory.

Fixed-line telephony and the companies that provide it are being eaten alive by mobile, with more than 60pc of all voice traffic now going by mobile.

As a result, the proportion of Irish homes with a fixed line has now fallen to just 70pc.

However, the rise and rise of mobile is only a part of Eircom's problems.

Despite this, the company is still trading profitably and remains by far the most dominant fixed-line company in the country.

Eircom's biggest problem is its more than €4bn of debt, a legacy of the repeated changes of ownership since 1999.

In 2001, it was taken private by the Valentia consortium in a €3bn deal.

Three years later, Valentia exited and Eircom was refloated on the Stock Exchange.

In 2006, Eircom was sold on once again to the Australian firm Babcock & Brown for €2.4bn and, when B&B went bust in 2009, Eircom was sold yet again, this time to STT of Singapore for €140m.

Along the way, Eircom sold its mobile subsidiary to Vodafone in 2001 and four years later, in mobile telephony's equivalent of Lanigan's Ball, bought Meteor from Western Wireless for €420m.

Now, with STT after walking away, Eircom is on the market once again.

While its first lien lenders, who are owed €2.7bn, will end up controlling the company in return for taking a 15pc "haircut" on their loans, no-one expects the lenders to be long-term holders of Eircom.

Far more likely is that, just when the Government is seeking buyers for State-owned assets, it will find itself competing with Eircom's bankers for the chequebooks of the very shallow pool of purchasers of Irish assets.

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