Incumbent Eircom is accelerating debt talks since it is likely to breach financial covenants within three months. CEO Paul Donovan said it is imperative to accelerate negotiations with shareholders and lenders about how to manage a potential…
Incumbent Eircom is accelerating debt talks since it is likely to breach financial covenants within three months. CEO Paul Donovan said it is imperative to accelerate negotiations with shareholders and lenders about how to manage a potential breach.
Gleacher Shacklock and JPMorgan are continuing to advise the group on a range of options to avoid the breach, including a restructuring, debt swap or rights issue.
Meanwhile, SMBC Bank has reportedly become the sixth member of an ad hoc committee of the company’s first lien lenders. Eircom, which was unable to comment, has previously said that the committee, which is being advised by restructuring specialist Houlihan Lokey, required a sixth member in order to be officially recognised by the company.
This committee also includes Harbourmaster, Alcentra, Avoca, Deutsche Bank and GSO, which together represent ?2.6bn in senior debt.
Eircom has ?3.75bn of outstanding debt in total. Q3 2011 revenue for the three months ended in March was ?407m, an 11 per cent decrease compared with the corresponding period last year. It posted Q3 2011 adjusted EBITDA at ?160m, down ?10m on last year. Commenting on the results, Donovan said: “Despite sustained progress to reduce operational costs, the underlying fundamentals of the Irish economy and intense competition continue to create trading challenges for the group across both our fixed and mobile segments.”
