Temasek-backed Eircom applies for court protection over $4.8b debt
Eircom, the telecoms operator owned by Singaporean sovereign wealth fund Temasek, has applied for court protection to allow it to restructure its EUR3.75 billion ($4.8 billion) debt pile.
The company, which was formerly Ireland's state telecoms operator, became 65%-owned by Temasek unit ST Telemedia (STT) in 2009, when the sovereign wealth fund paid EUR140 million in equity and shares for its stake. An employee share trust owns the remaining 35% of the business.
Eircom's application follows its approval of a proposal for most of the company's senior lenders to take control from STT and reduce the debt by 40-50%. It is now hoping to have its assets protected from creditors for up to 100 days, while it works out a plan to revive the business.
"This is a necessary and unavoidable step on our journey to addressing the unsustainable level of debt on our balance sheet and continuing our operational transformation into a vibrant and competitive company," commented eircom CEO Paul Donovan, who is leaving the firm.
Eircom currently has EUR4.1 billion of gross debt and in excess of EUR300 million of cash on its balance sheet, bringing its net debt to approximately EUR3.75 billion.
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