Eir eyes €350m bond refinancing as sales, earnings rise

Eir, which reported a fourth consecutive quarter of sales growth on Thursday, is highly likely to refinance €350 million of high-cost bonds next month, according to the telecoms group’s chief financial officer.

The company, formerly known as Eircom, has an option to redeem the bonds, which carry a 9.25 per cent interest rate, in mid-May and could save as much as €15 million in interest costs by selling a new bond in a more favourable market.

“If the market stays as it is today, there’s a big chance that we do it,” said Huib Costermans in an interview with The Irish Times, noting that the market for high-yield debt has “opened up” in the past few months following volatility at the start of the year.

Eir has not yet decided whether it would issue new bonds, extend its existing creditor loans or obtain another credit facility to refinance the notes, he said.

Sales at Eir continued to recover in the first three months of the year, the company’s third financial quarter, from years of decline to rising 3 per cent to €321 million on the same period last year. When Eircom made an abortive attempt at a third initial public offering in its lifetime in 2014, potential investors were said to have been concerned about the company’s ongoing falling sales figures.

Since then, the company has focused on pushing its quad-play offering, including broadband, landline, mobile and television products. The company is currently integrating Setanta Sports Ireland, which it bought last year for an estimated €20 million, and will unveil a plan within months to offer the broadcaster's contents across the group's platforms.

However, broadband is the main focus at the moment. Eir aims to reach 1.6 million premises with its high-speed fibre network by the end of June.

Eir’s shareholders, led by US investment firm Anchorage, have no plans to revisit an IPO of the business, the Irish company’s chief executive Richard Moat said in the same interview.

Earnings before interest, tax, depreciation and amortisation increased an annual 4 per cent to €125 million in the quarter ended in March. That’s before the company incurred €5 million of costs repairing its networks following storms during the first three months of the year.