Eir’s debt rating downgraded by Fitch

Earlier this year, Eir sold 49.9% stake in wholesale broadband subsidiary Fibre Networks Ireland to French private equity firm InfraVia

Fitch, the credit ratings agency, has downgraded its stance on Eir senior secured debt, saying its financial standing has been weakened following the sale of a large minority stake in its wholesale broadband subsidiary and subsequent debt sale at the unit.

Fitch’s rating on the debt has fallen by one level to BB-, which is three levels deep into what’s known as junk, or non-investment, grade.

Earlier this year, Eir sold off a 49.9 per cent stake in its wholesale broadband subsidiary, Fibre Networks Ireland (FNI), to French private equity firm InfraVia. FNI went on to raise €765 million in debt.

Net proceeds from the deal, including the debt sale, totalled €1.2 billion, a company spokeswoman said in response to questions from The Irish Times this month.


The deal underpinned Eir’s payment of €800 million of dividends in the nine months to September to a holding company owned by its main shareholders, French billionaire Xavier Niel and two US hedge funds, Anchorage and Davidson Kempner.

“In a hypothetical financial distress scenario at Eir, we would expect the [group’s] finance company debt holders to now have a weakened claim over Eir’s fixed-line infrastructure assets, which we view as the most valuable component of Eir’s network and were moved to FNI in July 2022,” Fitch said.

Revenues last year came to €1.24 billion, down almost 5 per cent from the 12-month period to June 2017 – and continuing a trend of ongoing decline that started in 2008.

However, Eir’s earnings before interest, tax, depreciation and amortisation (ebitda) jumped more than 27 per cent between 2017 and 2021, to €662 million – driven by cost-cutting at the company.

Fitch said it expected dividend payments to fall to an average of €100 million a year between 2023 and 2025 and debt buybacks to total €600 million between this year and next.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times