An examiner appointed to the indebted Eircom group has recommended a scheme of arrangement based upon a proposal put forward by its senior lenders.
Michael McAteer of Grant Thornton has convened a creditors meeting for next Friday in Dublin at which the proposal, by the first lien co-ordinating committee of lenders, is to be considered.
The first lien scheme would see lenders take a 15 per cent haircut on their €2.7 billion in loans while also getting all of the equity in Eircom. The second-lien lenders would get 10 per cent of the €350 million they are owed.
“As I have signed the implementation agreement, no other proposal will be considered,” he said in a statement.
“This is an important step in the process which will hopefully allow eircom Limited, Meteor Mobile Communications Limited and Irish Telecommunications Investments Limited to successfully exit the examinership process in the coming weeks.”
The High Court last month confirmed the appointment of an examiner to Eircom having heard that, although trading profitably, Eircom's debt to various classes of creditors stood at €3.4 billion.
Mr McAteer last night last night rejected a revised cash offer for Eircom from 3 Ireland and its Hong Kong-parent group Hutchison Whampoa.
The new bid included a €50 million cash offer to floating rate note holders, an impaired class of creditor who stand to be wiped out under the consensual deal agreed by the examiner and Eircom’s senior lenders.
The overall cash element of the revised bid from 3 and Hutchison remained at €2 billion, but the multinational removed all conditionality with the exception of it being subject to due diligence.
The revised bid was submitted last Sunday.