AUSTRALIAN INVESTMENT fund Babcock Brown Capital is on the hunt for a new chairman at Eircom after the unexpected resignation of its executive chairman Pierre Danon, who is leaving to become chief of a Paris-based telecoms operator.
The announcement of the French man's departure comes amid scrutiny in Australia over the business model employed by numerous listed funds affiliated to investment bank Babcock Brown for the management of infrastructure and other assets. The bank is reviewing the funds after a big fall in their share prices.
Babcock Brown Capital, which is buying back half its shares, has all but shelved plans to separate Eircom's phone network from its retail arm. Within the past month the Government rejected its request for €150 million in public funding for a high-speed broadband system.
Mr Danon, who said he would stay for five years when joining Eircom in mid-2006, will remain in situ until the appointment of his successor. It is unclear whether Babcock will look to the Irish or international business community for a new chairman.
"Pierre has been a tremendous asset to Eircom since he took up his position as chairman and we are sorry to see him go. However, we wish him well in his new opportunity and thank him most sincerely for his service to the company in the past two years," said Rob Topfer, the Babcock Brown Capital director who orchestrated the Eircom takeover.
The fund and the bank own 65 per cent of Eircom, the remainder of which is held by an employee share ownership trust.
Mr Danon said he would in three or six months start his new job at Numericable-Completel, a provider of fibre-based fixed-line services. Asked why he was leaving now, he said he had "resisted" many other offers since his arrival at Eircom but judged the opportunity with his new employer to be unique. He felt he was in a position to approach Eircom's shareholders because the company was in a strong position.
"It has been a great pleasure to work with the Eircom executive team and its employees over the past two years," he said.
"Over that time period we have significantly accelerated the company's investment in the country's infrastructure, supported by a commitment to invest up to €1 billion by the end of 2009, taken major steps to open it to additional competition through local loop unbundling and improved overall customer service levels."
