Investor bid to cherry-pick top Eircom assets rejected
EIRCOM examiner Michael McAteer rejected attempts from investors to cherry-pick the best parts of the business after it filed for insolvency last month, the Commercial Court in Dublin was told yesterday.
The court heard that Mr McAteer rejected the offers because he believed a break-up of Eircom would damage its long-term survival prospects.
Eircom was forced to go to court last month to seek protection from creditors owed up to €4bn after running up debts in a decade-long borrowing spree.
Despite the scale of borrowings, the examinership process looks set to complete in record time. Mr Justice Peter Kelly said yesterday that a second hearing on May 18 could clear the way for final confirmation of a plan to emerge from bankruptcy as early as May 24.
A rapid examinership process is likely because Eircom and its top lenders have already agreed a scheme to write off €1.8bn of debt and to hand ownership of the business to the secured lenders.
The plan is set to form the basis of an Examinership proposal, and that moved a step closer after the examiner was formally confirmed with no objections from stakeholders yesterday.
Mr Justice Kelly confirmed the appointment of Mr McAteer of Grant Thornton as examiner to the main Eircom operating businesses.
He ruled that Eircom was insolvent "in spades" but had a good chance of emerging as a viable business as a result of the examinership process -- the two main conditions for being placed into examinership.
Lawyers for Eircom bondholder DW Investment Management -- which holds some of Eircom's €350m of floating rate notes (FRN) -- said it was concerned about the ultimate plan to write off that debt, but did not object to examinership.
The FRN holders are expected to object if the final scheme includes paying all trade creditors in full but paying nothing to FRN holders. Both groups are unsecured creditors.
Mr Justice Kelly said yesterday that trade creditors would continue to be paid as normal during the examinership.
Lawyers for the Revenue said it was owed €60m by the Eircom group and wanted to be kept informed of any developments in the case.
Lawyers for regulator ComReg and telecoms rival Vodafone also successfully argued the bodies should be updated on all events in the case. Vodafone is Eircom's biggest customer for wholesale services.