US-based Blackstone Group’s asset management business is reportedly in talks with Irish incumbent Eircom’s top lenders to table a takeover offer for the operator.
Blackstone GSO will put forward a proposal on 14 March to help restructure Eircom’s…
US-based Blackstone Group’s asset management business is reportedly in talks with Irish incumbent Eircom’s top lenders to table a takeover offer for the operator.
Blackstone GSO will put forward a proposal on 14 March to help restructure Eircom’s €3.75bn (US$4.92bn) of debt, reported the Irish Independent citing sources.
The reported offer will see Blackstone GSO, which is already a major lender to Eircom, provide an extra €150m (US$196m) in exchange for reinstating its old loans on improved terms, and taking a share of control that would be on an equal basis to other lenders.
Blackstone GSO and Eircom were unable to comment on the speculation.
The development comes after the deadline for a third party to help restructure Eircom’s debt expired on 12 March. This sales process was run by Morgan Stanley. Before Blackstone GSO’s reported intervention, Eircom’s lenders were looking at filing a petition for the Irish equivalent of US Chapter 11 bankruptcy protection, called Examinership.
But under Blackstone GSO’s proposals, Eircom could avoid Examinership altogether, added the report citing trade journal Capital Structure.
These proposals reportedly include a €35m sweetener for second lien lenders that would ultimately see €350m of their debt wiped out under the plan. The sweetener is necessary because hedgefunds that own the company’s second lien debt also hold parts of its €2.6bn first lien debt.
Houlihan Lokey is advising the first lien lenders, while Moelis is thought to be advising the second lien debtors.
The company is currently 65% owned by investor group Singapore Technologies Telemedia (STT), with employee share trust ESOT holding the remaining 35% stake.
An earlier proposal by STT to restructure the business was ruled out late last year by a majority of its first lien lenders.
