EIRCOM YESTERDAY began talks with a committee representing 28 per cent of its first lien lenders on a debt restructuring.
Eircom said it had recognised the co-ordinating committee, which is comprised of Alcentra, Avoca Capital, Deutsche Bank, GSO Capital Partners LP, Harbourmaster Capital and SMBC. The committee’s financial advisors are Houlihan Lokey. Legal advice is provided by Kirkland Ellis.
Eircom has engaged investment banks Gleacher Shacklock and JP Morgan, and law firm Linklaters to represent it in talks.
As is normally the case in these matters, Eircom will pay the adviser costs for the lenders.
First lien lenders at Eircom are owed a net €2.36 billion. The company’s total net debt is €3.7 billion.
Eircom will publish full-year results next month, and is expected to announce it had breached its covenants at the end of June.
The negotiations on a financial restructuring of Eircom’s debts are expected to be complex and could last for a number of weeks.
It is understood that Ernst & Young has completed its independent review of Eircom’s recently-completed business plan. This review has yet to be shared with the senior debt lenders.
Talks with Eircom’s shareholders – Singapore-based STT and the employee Esot – on a possible equity cure will also be held.
