AT A SPECIAL meeting in Sydney yesterday, shareholders of Babcock Brown Capital (BCM), which controls 57 per cent of Eircom, voted overwhelmingly against a controversial remuneration and termination package for newly appointed chief executive Andrew Day.

This opens the way for a renewed bid for BCM from TaemasBridge, a company led by former BCM director Rob Topfer.

Mr Topfer threatened last week to withdraw the TaemasBridge offer of Aus$1.05 (€0.57) a share if the package for Mr Day was passed.

BCM chairman Kerry Roxburgh said he was not surprised by the 88 per cent vote against the incentive package for Mr Day.

“I think markets are about fashion and it’s fashionable at the moment to be tough on executive remuneration,” he said. “There’s plenty of good reasons for that to happen. We don’t regard it as a slap in the face.”

Mr Roxburgh had earlier referred to the difficulty of hiring Mr Day in “a situation which required danger money”.

In rejecting the TaemasBridge claim that Eircom would breach its debt covenants in 18 months, Mr Roxburgh said: “On the numbers and forecasts we’re seeing out of Eircom, there is no looming default.”

He said BCM’s board did not understand the structure of TaemasBridge and there were issues relating to the proposal which the board finds unacceptable.

“We don’t know how it works,” he said. “We have requested Mr Topfer to clarify certain aspects of his proposal . . . The current plan is not one we can recommend.”

Mr Roxburgh said several proposals were being considered by the board but that they were confidential, with the exception of the TaemasBridge proposal.

“If a proposal is confidential and incomplete, there is no obligation to name them,” he said.

Shareholders at yesterday’s meeting also voted to separate from its former parent company Babcock Brown and to change BCM’s name to Eircom Holdings.

Mr Roxburgh said the employee share ownership trust (Esot), which owns 35 per cent of Eircom, was “very pleased that we sought consent and permission to change the name”.

Mr Day, who will be in Dublin for two days of meetings later this week, told The Irish Times that BCM had “a very constructive relationship with Esot”.

“We see ourselves as partners in this business.

“The Esot does have some rights under the shareholders’ agreement and the shareholders agree to hold back on some particular things such as compulsory redundancies.

“We believe we can work through that constructively with them,” he said.

“We don’t believe those issues are going to get in the way, but that doesn’t mean that we’re not going to try to approve them where we see fit.

“We are working with them , with the common aim of improving the company – making sure the management’s right, making sure the right business plan is in place and making sure the company can be more competitive . . .

“We have a very strong alignment from those perspectives. There might be some areas in which we have disagreements. We’ll try to sort those issues as partners, by sitting down and having logical discussions.”

Mr Day said it was important to have “a strong relationship with the Government. We’re not trying to run Eircom from Australia.”

Mr Roxburgh admitted Babcock Brown Capital had a “tarnished reputation in Ireland” but said Mr Day was “playing a pivotal role in the rebuilding of relations” with Eircom stakeholders including the Esot, unions, ComReg and the Government.

BCM’s share price closed at Aus$.10 yesterday, up 11.11 per cent.