Eircom chief executive to resign in December

EIRCOM’S CHIEF executive Paul Donovan has decided to leave the company at the end of 2012 for “personal reasons”.

His decision comes as the company prepares to conclude a major restructuring of its debts and faces into examinership in the coming days. Mr Donovan’s three-year contract with Eircom was due to expire at the end of June.

He has agreed a six-month extension and will leave at the end of December.

It is understood that Mr Donovan, who hails from London, has no firm plans regarding his next career move but he is expected to return to the UK.

In a statement, Mr Donovan said renewing his contract with Eircom would have required a new “multi-year commitment which I am not in a position to make”.

The nine-month notice period will allow Mr Donovan to complete the financial restructuring of the business. It will also give the Eircom board, chaired by Ned Sullivan, plenty of time to find a replacement for Mr Donovan.

Mr Sullivan said he regretted Mr Donovan’s decision to leave.

“Since joining the company in 2009, real progress has been made to transform the business,” Mr Sullivan said. “A clear strategy now underpins the group as we progress towards a sustainable future.”

Mr Donovan joined Eircom in July 2009, having spent a number of years with Vodafone, including a spell in charge of its Irish arm.

Since joining Eircom, he has negotiated further restructuring of employee numbers and work practices; negotiated a deal to resolve its pension deficit; and led the financial restructuring.

On a strategic level, Mr Donovan oversaw the launch of eMobile and the rollout of a fibre network. Eircom will also shortly launch TV services to customers.

The company’s ebitda (earnings before interest, tax, depreciation and amortisation) has shrunk significantly during his tenure and it has struggled to compete with rivals on pricing, notably cable group UPC. The financial restructuring has taken longer than most expected and saw its Singapore-based majority owner STT walking away from the Irish business.

Under a proposed restructuring, about 200 senior lenders are set to take control of Eircom while taking a 15 per cent haircut on their €2.7 billion debts. The restructuring is expected to take effect via examinership, likely to begin on Thursday or Friday.