Fitch says Hribar’s Eircom exit may affect its credit rating

The ratings agency Fitch has indicated it views the recent departure of Eircom chief executive Herb Hribar as a negative factor that could affect the company's credit rating.

Mr Hribar stepped down as chief executive at the end of last month, after the company pulled a proposed flotation. He has already returned to his native US, while the company's chief financial officer, Richard Moat, takes charge as acting chief executive until a new appointment is made.

Fitch said the loss of key executives often leads to an “immediate rating action” and said the departure of Mr Hribar “is a prime example”.

“We viewed Hribar as instrumental in the operational turnaround of the company since he joined the firm in late 2012,” Fitch said this morning.

Under [his leadership], Eircom invested heavily in fibre, quickly surpassing the reach of cable operator UPC, substantially cut costs, launched a TV offering, acquired 4G spectrum, and rolled out LTE mobile technology."

Fitch said these actions were central to the stabilisation of the company.

“The clarity with which these plans were laid out and the speed they were implemented were as much a driver in stabilising eircom’s ‘B-‘ rating in February as was the progress made on revenue and cash flow,” it said.

Fitch said the negative impact of Hribar’s resignation is somewhat “mitigated” by the depth of implementation of Mr Hribar’s strategy that has already ocurred.

“Continuity is also provided by acting CEO Richard Moat, whom we consider another influential part of the team responsible for eircom’s progress,” it said.