Plans to finalise Irish incumbent Eircom’s restructuring process on Friday with creditors could be disrupted by legal proceedings being reviewed today.
Hong Kong-based conglomerate Hutchison Whampoa is taking legal action against the firm responsible…
Plans to finalise Irish incumbent Eircom’s restructuring process on Friday with creditors could be disrupted by legal proceedings being reviewed today.
Hong Kong-based conglomerate Hutchison Whampoa is taking legal action against the firm responsible for restructuring the company’s debt, after its revised €2bn cash offer was rejected last week, according to sources.
The proceedings are being supported by New York-based DW Investment Management, which represents 52.4% of creditors holding Eircom’s €350m floating rate loan notes (FRNs), who will see this debt wiped out under current plans.
Hutchison, DW Investment Management, and Grant Thornton, which is overseeing Eircom’s restructuring, declined to comment.
The applicants filed a motion yesterday to take the matter to court, and a judge will decide this afternoon whether to grant the application, reject it or adjourn on the issue.
A current scheme of arrangement to restructure the operator, recommended by Grant Thornton, is thought to see first lien lenders reduce the €2.7bn they are owed by 15%, with second-lien lenders receiving only 10% of their €350m debt, in return for equity.
The move would wipe subordinated debt, comprising €350m in FRN notes and €700m held by PIK lenders.
It is understood that Hutchison’s takeover proposal included a €50m payment for FRN holders.
Hutchison, which is already in the Irish market through its ownership of mobile operator 3, is arguing for due consideration in terms of its offer.
MOP LLP is Hutchison’s legal adviser, and Cadwalader, Wickersham & Taft LLP is advising the FRN lenders.
