SINGAPORE-BASED majority shareholder in Eircom, ST Telemedia (STT), has made a balance sheet restructuring proposal to the independent directors of the debt-riddled company.

Earlier this month STT surprised many observers of Eircom’s fortunes when it said it would not be submitting a proposal “owing to the continuing macro-economic uncertainty in the euro zone”.

A spokesman for STT would not comment when asked why it had subsequently tabled a proposal.

The announcement by the Singapore fund came as Eircom’s syndicate of first-lien lenders were to meet to discuss their co-ordinating committee’s proposal to take over the heavily indebted business. Eircom has net debt of €3.7 billion and has breached its lending convenants. The company yesterday briefed lenders about its October trading performance. While a spokesman would not disclose what was said, it was expected that the lenders would be told that trading conditions remain difficult.

Eircom’s desire for a further extension to the waiver it has on its covenant breach was also on yesterday’s agenda. The current waiver expires on Thursday.

Independent directors of Eircom have already received two proposals for restructuring its massive debt, including a suggestion from its first lien lenders, who are owed €2.4 billion, that they take full control of the business.

They would take 100 per cent of Eircom’s equity in return for writing down their debt by 7 to 9 per cent, and extending the maturity date of the debt.

Second lien lenders, who face having their debt wiped out, have also submitted a proposal.

Yesterday ST Telemedia said that while it was difficult to comprehensively assess the impact on Eircom of possible changes within the euro zone, it had decided to submit a balance sheet restructuring proposal.

“Our proposal is targeted at giving Eircom an optimal chance to be competitive and viable by addressing the company’s long-term balance sheet issues, while supporting its ongoing business strategy.”

It said it looked forward to engaging in constructive discussions with the independent directors and the first lien co-ordinating committee, in an expedited manner, in relation to the proposal.

It is thought that the Eircom Esot may participate in the proposed ST Telemedia proposal. An attempt to contact the Esot yesterday was unsuccessful.

Eircom’s independent directors are due to assess the proposals that have been submitted before taking the matter to a meeting of the full board. Any solution to the company’s difficulties would also have to be negotiated with the first lien lenders.

ST Telemedia made an initial proposal in August 2011 which is understood to have involved an investment of €300 million in infrastructural development, with lenders cutting their debt by 7 per cent to 8 per cent, and getting 20 per cent of the company in return.

In yesterday’s statement ST Telemedia said that since it made its initial investment in Eircom it had played an instrumental role in guiding and assisting the company in achieving a number of important milestones.

“We believe that this strategic guidance and support combined with an appropriate balance sheet structure, will optimally position the company,” it said.