Eircom has completed the payment of €512 million to the Valentia consortium following the closure of its €1 billion bond a week ago.

A spokeswoman for Eircom confirmed yesterday that the payout, which will benefit Valentia shareholders including Sir Anthony O'Reilly and the Eircom Employee Share Ownership Trust (ESOT), had been made in the week ending August 8th. She was unable to say whether the payment had since been distributed to the Valentia shareholders.

Sir Anthony O'Reilly is due to net 20 million from his 5 per cent shareholding, while the ESOT is thought to be entitled to some €230 million. Other shareholders include Soros Private Equity Partners and Providence Equity Partners.

The payout comprises a €446 million dividend and the redemption of preferential shares worth €66 million. The total outlay amounts to more than half the €1 billion that Valentia paid to take over Eircom in 2001.

It has been suggested that the firm's ability to make the payment so soon after it was acquired by the consortium means it was sold at too low a price.

The 512 million settlement has been facilitated through Eircom's €1 billion bond, which has been listed on the Irish Stock Exchange as three separate securities.

Eircom transferred its ownership out of the State as part of the transaction, and is now owned by a €2 shelf company based in the UK. The move enabled the firm to operate under a different legal system and provided for greater flexibility on the payment of dividends.