Singapore firm STT to bring 'new vision' for Eircom
THOUSANDS of Eircom workers will today be working for a new owner, as Singapore Technologies Telemedia (STT) completes its acquisition of the telco, heralding its fifth change in ownership within a decade.
The €140m deal to buy Eircom from its Australian owner, Eircom Holdings, had been approved by shareholders before Christmas.
A spokeswoman for STT, which is based in Singapore, reiterated that the firm would be working closely with management and employees to determine a "sound vision and strategy" in coming weeks.
It has also emerged that almost no shareholders in Eircom Holdings opted for a scrip consideration that would have enabled them to receive both a cash amount and shares in Emerald Communications, the new holding company for Eircom established by STT.
A minimum of 10pc of Eircom Holdings' total issued shares had to be elected by all shareholders for the scrip condition to be activated, but the total amounted to just 1.16pc of issued shares, meaning that shareholders will now only receive a cash consideration.
STT is buying the 57.1pc of Eircom that was owned by the Australian investment firm, formerly known as Babcock & Brown Capital. A further 35pc of Eircom is controlled by the Employee Share Ownership Trust.
STT has previously warned that debt-laden Eircom, which is headed by chief executive Paul Donovan and employs nearly 7,000 people, faces "numerous challenges".
Over €1.2bn of Eircom's almost €4bn in net debt is repayable in 2014, and another €1.2bn in 2015. Its debt pile, coupled with a significant pension deficit, will be occupying the minds of STT executives charged with steering a new course for the telco.
STT will also be reinvigorating efforts by Eircom management to reverse declining revenue and stagnant profitability. The company is engaged in a rationalisation process. It is aiming to eliminate 1,200 jobs, while 700 workers have already left under the programme.