Bondholders have cleared the way for Eircom to return to the stock exchange and it is expected that the company will launch an initial public offering (IPO) by the middle of March. The shares will be listed on the Dublin and London stock exchanges.
Eircom's parent, Valentia Telecommunications, has also moved to strengthen the telecom company's board ahead of the IPO, making several key appointments.
Valentia had offered bondholders in excess of €3.75 per €1,000 of bonds held in incentive payments. It had also twice extended the deadline for bondholders to accept its offer by approving changes in its covenants.
The company needed the support of 50 per cent of its bondholders. Eircom bondholders hold almost $1.1 billion (€875 million) in bonds. It is understood that the incentives have cost the company around €20 million.
However, sources said that figure was offset by changes in the bank debt, which moves from being unsecured to secured.
The changes were needed before Valentia could recommence dividend payments and were a prerequisite of flotation.
The incentive payments agreed with the bondholders kick in on condition that the IPO raises a minimum of €300 million. This will easily be surpassed as the flotation is expected to raise €3.4-€3.6 billion.
It is also understood that Eircom is planning several changes to its board. Sources said that board changes were at an advanced stage.
The company is poised to appoint its chief financial officer, Mr Peter Lynch, to the board, where he will join chief executive Mr Phil Nolan.
Mr Con Scanlon, the general secretary of the Communication Workers Union will remain as deputy chairman. Mr John Conroy of Merrion Stockbrokers, who represents the Employee Share Ownership Trust (ESOT) will also remain on the board. The ESOT, representing current and former Eircom employees, holds 29 per cent of the company.
It is understood others have been approached but have not formally agreed to serve on the board. These include Mr Padraic O'Connor, formerly of NCB stockbrokers. He holds several directorships, including Alltracel Pharmaceuticals and employee-benefits consultancy Becketts. Another appointment to the board is expected to be Mr Donal Roche, former managing partner of law firm Matheson Ormsby Prentice.
Former Equant chief executive Mr Didier Delepine has also been approached. Equant, a France Telecom subsidiary, is a major player in the telecoms market.
Eircom's board met last night to discuss the appointments.
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