Second group of Eircom lenders ups ante in bid for debt-talks role
A second group of lenders to Eircom has moved to be given a formal role in debt talks with the troubled telecoms company.
Eircom has already recognised and is engaged with one co-ordinating committee elected by senior debt holders. And it was revealed last week that a vote by senior lenders to Eircom on whether to allow the company a 'waiver' over repaying its debts had given the group an opportunity to insist on being recognised in debt talks.
Senior debt is made up of two slices of first-lien and slightly subordinate second-lien loans.
The group is being advised by boutique investment bank Moelis & Company, and has long pushed without success for separate recognition because it holds mainly second-lien loans, unlike the committee that has been dealing with Eircom.
Moelis has now issued a notice inviting second-lien lenders to "confirm their support for the formal creation of a creditor committee representing their interests in the Eircom restructuring".
At the moment the second-lien lenders have an informal co-ordinating "second-lien committee" that does not have the same access or standing of the senior creditors.
In the notice, Stephen Aulsebrook, of Moelis, writes that "communications to date between Eircom and the second-lien committee have been quite limited in their scope and, consequently, we believe that formal representation of the second-lien lenders by the second-lien committee and recognition by the group of the second-lien committee is an important next step in the restructuring process.
"This will facilitate further engagement and dialogue between the second-lien lenders, Eircom and the other stakeholders in relation to the restructuring generally.
"For this purpose, we propose that the second-lien lenders vote for the second-lien committee to be formalised and that we seek recognition of the second-lien committee by the group.
"By creating a formal committee we will be allowed to properly engage the company to a much greater degree and have access to management and Ernst & Young (who carried out a review of Eircom's new business plan)," Mr Aulsebrook told the Irish Independent.
Under the terms of the notice, lenders have until September 9 to support the plan.
Eircom did not comment on the development.