Monday 19 February 2018

Eircom first-lien lenders study examinership

Telecoms

Donal O'Donovan

Donal O'Donovan

EIRCOM'S international lenders have been holding workshops to familiarise themselves with the Irish "examinership" system.

It's the clearest sign yet that the telecom giant is rapidly lurching towards the courts to restructure its €3.75bn debts.

The Irish Independent has learned that Eircom's top lenders have hired insolvency accountant Kieran Wallace of KPMG as "shadow examinership adviser".

The KPMG partner is advising Eircom's most senior or 'first lien' lenders, a group made up of dozens of hedge funds and banks owed €2.6bn.

Around 150 of the first-lien investors have attended 12 training seminars in London plus a session in Dublin over the past two weeks.

At the sessions, lenders were brought up to speed on the examinership process. The Irish legal system was explained in detail and compared to the UK and US bankruptcy regimes that are more familiar to most of the global money managers.

Committee

The sessions were organised by the co-ordinating committee that represents the 'first lien' or top-ranked Eircom lenders.

A separate group of lower ranked "second-lien" lenders owed a further €350m has already been working with its own local experts.

They have hired David Carson of rival insolvency experts Deloitte as adviser.

The first-lien group is first in the queue to be repaid if the company becomes insolvent.

It means they are the best placed to take control of the entire business under a debt-for-equity swap, and are understood to be increasingly keen to force the business through an examinership to try to cancel debts owed to other lenders.

A spokesman for the second-lien lenders told the Irish Independent that said they would fight any effort to wipe out their loans in the courts.

Their latest effort to be allowed to table a joint bid with the firs-lien lenders for control of the business has failed to gain any support, but may be revised.

Eircom's main owner STT last month pulled out of the race to control the business, leaving the two lender groups in contention.

Irish Independent

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