STT reveals Eircom debt refinance plan to Ryan
EIRCOM owner Singapore Technologies Telemedia (STT) has confirmed to Communications Minister Eamon Ryan that it is considering a number of refinancing options at the country's largest landline provider in relation to the company's huge €3.3bn debt pile.
The confirmation comes after comments in May from Eircom's chief financial officer, Peter Cross, who told analysts the company was not preparing to undertake any type of debt restructuring.
In a June meeting with Mr Ryan, STT managing director Terry Clontz -- who also sits on the Eircom board as well as STT chief financial officer Stephen Miller -- said refinancing options were being considered by financial advisers hired by the phone company.
These advisers are understood to be London-based boutique financial firm Gleacher Shacklock and JP Morgan. Ratings agency Standard & Poor's has recently warned that Eircom could breach at least one of its debt covenants next year.
The recent meeting -- minutes of which have been seen by the Irish Independent -- was also attended by Jerome Barrett from the Employees Share Ownership Plan as well as the department's secretary general Aidan Dunning.
Mr Clontz told them that the decline in Eircom's EBITDA (earnings before interest, tax, depreciation and amortisation) had moderated and that employees had responded well to calls for 1,200 voluntary redundancies.
In its last quarterly results issued in May, Eircom said that for the three months to the end of March its group revenue had fallen 7pc year-on-year to €455m, while EBITDA had declined 4pc to €170m.
At the time Eircom chief executive Paul Donovan would not say when he expected the continuing decline in EBITDA at the company to be halted.
Mr Clontz also said at the June meeting that significant challenges remained to be addressed in ongoing discussions with telecoms regulator Comreg. It's understood that those discussions concern both Eircom's debt levels and Comreg's regulatory approach to the telco.
STT representatives previously told Mr Ryan that Eircom's "balance sheet" challenge is the key short-term issue for the telco and that STT and Eircom have been involved in dialogue with Comreg regarding it, but that those talks had been progressing slowly. Eircom releases full-year results later this month.
STT also broached the topic of the National Roads Authority with the Mr Ryan.
In March, the Government passed legislation to grant telecoms firms access to ducts adjacent to motorways and primary roads that can be used to lay cable.